Case Results
SLAPP010 – Travolta and Yelp Anti-SLAPP Motions
In this week’s podcast, we look at two unsuccessful anti-SLAPP motions that were decided this week, and examine where the attorneys went wrong.
Yelp continues to get into mischief. In Episode 4 of the California SLAPP Law Podcast, we discussed the case of Yelp v. McMillan Law Group, wherein Yelp is suing a law firm, claiming that it posted fake reviews, and that Yelp was damaged as a result. McMillan Law Group filed an anti-SLAPP motion, and we are awaiting the results.
Now, in the case of Demetriades v. Yelp, the tables have been turned, and the plaintiff is essentially suing Yelp for its fake reviews about itself. Yelp tries to promote the notion that its reviews are filtered and trustworthy, despite all evidence to the contrary. Demetriades, who has had several bogus reviews written about his restaurant, didn’t try to sue Yelp for those bogus reviews, but instead sued Yelp for claiming that reviews on the site are trustworthy. Yelp brought an anti-SLAPP motion, which was DENIED.
We also examined Douglas Gotterba v. John Travota, where Travolta’s former pilot from the 80’s has decided to publish a tell-all book about Travolta, that apparently alleges a homosexual lifestyle. When Travolta threatened to sue, claiming Gotterba was subject to a confidentiality agreement, Gotterba did exactly what you are supposed to do, and filed a declaratory relief action.
Basically, Gotterba is simply asking a court to determine if he is in fact subject to a confidentiality agreement. If so, he will slunk away into the night. If not, then he will be free to publish the book. Great solution, right?
Not according to Travolta’s attorneys. they claimed that Gotterba’s action was really just an attempt to get Travolta’s attorneys to stop sending warning letters to publishers. Since pre-litigation letters are privileged, they brought an anti-SLAPP motion against the declaratory relief action.
The Court of Appeal ruled that the letters may have triggered the action, but they are not the basis of the action. Motion DENIED.
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SLAPP009 – Scope of Discovery after Anti-SLAPP Motion
It was a great anti-SLAPP week at Morris & Stone. Today we discuss two of our motions, and the result of last week’s Evil Yogurt Maker case. We will examine the scope of discovery following the filing of an anti-SLAPP motion, and apply those standards to a pending motion.
Specifically, I discuss the case of Britts v. Superior Court (2006) 145 Cal.App.4th 1112. In Britts, the defendant filed an anti-SLAPP motion on the same day that his opposition to a motion to compel was due. He argued that under the plain wording of CCP section 425.16(g), the motion stays all discovery “proceedings”, and therefore he was not required to file any opposition to the motion. The trial court disagreed, and granted the unopposed motion to compel, and awarded $5,000 in sanctions.
Britts took the matter up on a writ, and the Court of Appeal ordered the trial court to vacate the ruling on the motion to compel and for sanctions, holding that the statute means exactly what it says; an anti-SLAPP motion stops all discovery proceedings, including any pending discovery motions.
The trial court had also made a strange ruling (on an earlier anti-SLAPP motion in the case) that the defendant was not entitled to all the attorney fees incurred on the motion, because he had failed to meet and confer with opposing counsel. In other words, the court felt that if plaintiff’s counsel had simply been informed that one of the causes of action was a SLAPP, the complaint could have been amended and the motion avoided. That was not a holding from the case, but I explain why that reasoning is terrible and, if followed, could constitute malpractice.
I also discuss the case of Blanchard v. DirecTV (2004) 123 Cal.App.4th 903. In Blanchard, the court deliniated the scope of permissible discovery after an anti-SLAPP motion has been filed. As set forth in CCP section 425.16(g), a plaintiff must show good cause before taking ANY discovery after an anti-SLAPP motion has been filed. Good cause means ONLY discovery relevant to the Plaintiff’s burden of establishing a reasonable probability of prevailing on the claim. Discovery that is NOT relevant to a legal defense being asserted by the Defendant in the anti-SLAPP motion is not permitted.
Given that Blanchard permits only discovery related to potential defenses by the defendant, the case of Balzaga v. Fox News (2009) 173 Cal.App.4th 1325 came to the logical conclusion that if a plaintiff seeks leave to pursue discovery on a given defense, the defendant can prevent that discovery by informing the court that it is waiving that defense.
Finally, I discuss the case of Tutor-Saliba Corp v. Herrara (2006) 136 Cal.App.4th 604. This case sets forth the discretionary standard for granting leave to permit discovery following the filing of an anti-SLAPP motion, and held that a trial court’s decision to disallow discovery “will not be disturbed unless it is arbitrary, capricious, or patently ABSURD.” (Emphasis added.)
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Cooley Law School Loses Defamation Suit Against New York Law Firm
Cooley Law School has lost an appeal in their defamation lawsuit against a law firm that posted criticism of the school's reporting of student debt on a popular law school message board.
The school had filed a $17 million lawsuit against Kurzon Strauss LLC, a New York firm, and two attorneys associated with the firm, Jesse Strauss and David Anziska, accusing them of posting defamatory statements on the popular law school message board "JD Underground". The post said that federal regulators were investigating Cooley Law School over student loan default rates and employment for graduates.
Those statements were later retracted, but the firm then began preparing a proposed class-action lawsuit against the school, at which point Cooley filed its suit against the firm accusing them of defamation, breach of contract and interference with business relations, among other claims.
A trial court granted judgment to Kurzon Strauss before trial, saying that Cooley Law School was a "public figure" and therefore would have to prove that the firm acted with a disregard for the truth, a bar the court said Cooley could not clear
Source: www.mlive.com
When in individual or entity is deemed to be a "limited public figure", the theory is that such a person has greater access to the media, and therefore tell their side of the story. Therefore, when a limited public figure sues for defamation, they have a higher standard of proof to show that defamation. Specifically, they must show the person who allegedly defamed them acted with "actual malice" or "reckless disregard for the truth".
Here, the court concluded that Cooley Law School would not be able to meet that burden.
Go here for more Internet Defamation cases.
Read the rest of this entry »SLAPP007 – Proving Actual Malice in a Defamation Action – Makaeff v. Trump University
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”)).
Ninth Circuit Opinion finding that Trump University was a limited public figure.
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Conflict-of-Interest Suit Against Lawmakers No SLAPP, C.A. Rules
See on Scoop.it – California SLAPP Law
Anti-SLAPP motion denied.
A suit against a public official who is accused of acting on a contract in which he or she has a personal financial interest does not implicate speech or petition rights for purposes of the anti-SLAPP statute, the Court of Appeal for this district has ruled.
Similar to the HOA case I reported yesterday, the fact that the defendant is voting or acting in an official capacity does not successfully invoke the anti-SLAPP statute if the basis of the action is fraud or breach of fiduciary duty.
Here, members of the Los Angeles City Council voted 3-2 to award a 15-year, $150 million contract to a company in which one of the members had a financial interest.
The Court of Appeal, said the a council member’s vote is an act on behalf of the public, not the individual, and thus does not implicate free speech and petition rights.
See on www.metnews.com
Anti-SLAPP Ruling: Opinion by Standard & Poor’s Not Necessarily Protected Speech
With the wisdom of a penny-stock investor trying out day-trading for the first time, the brilliant financial minds at CalPERS (California Public Employees’ Retirement System) decided to dump more than a billion dollars into three “structured investment vehicles” or SIVs, backed by subprime mortgages. (That was a really long sentence but I think it’s grammatically correct.) After all, Standard & Poors had given these three SIVs AAA ratings, even though they were “stuffed full of toxic, subprime mortgages, home equity loans, and other types of structured-finance securities linked to subprime mortgages,” as CalPERS now alleges.
As most do when they make really bone-headed investment decisions, CalPERS looked for someone to blame, and settled on Standard & Poors for that AAA rating. It sued Standard & Poors for negligent misrepresentation, asserting that the ratings company should be held responsible for the losses suffered by CalPERS.
“But wait a cotton-picking minute,” said some fictional attorney representing Standard & Poors, “I read somewhere in law school that opinion is protected speech, and won’t support an action.” On that basis, Standard & Poor’s filed an anti-SLAPP motion, but a San Francisco judge denied the motion, finding that CalPERS had provided sufficient evidence to meet the second prong of the anti-SLAPP analysis. (Judge Richard Kramer to be precise, in case you happen to know the judges at the San Francisco Superior Court. Me, I never heard of the guy even though I have handled cases in that courthouse.)
Standard & Poors exercised its right to appeal that decision, but the Court of Appeal affirmed. As Justice Martin Jenkins (I don’t know him either) wrote:
We agree with CalPERS this evidence reflects that the Rating Agencies published the ratings from a position of superior knowledge, information and expertise regarding the SIVs’ composition, underlying structure and function that was not generally available in the market. More specifically, we conclude this evidence reflects not only that the Agencies employed superior knowledge and special information and expertise to assign ratings to the SIVs, they employed their special knowledge, information and expertise to participate in, and exert control over, the very construction of the SIVs. As such, we agree with CalPERS a prima facie case has been made that the ratings are actionable as ‘professional opinions’ or ‘deliberate affirmations of fact’ regarding the nature and quality of the SIV product.
While pure opinion speech is of course protected, and would generally protect Standard & Poor’s from it predictions, “the same cannot be said of the ratings at issue here, which were allegedly issued for private use by the limited class of investors dealing in complex and esoteric nonregistered securities,” Jenkins said.
IBM Mag Card Typewriter
The case is California Public Employees’ Retirement System, Inc. v. Moody’s Investors Services, Inc., 14 S.O.S. 2584. I have provided below the actual file-stamped copy of the complaint (complete with Civil Case Cover Sheet!) and the opinion of the Court of Appeal.
I have also attached a copy of the Order on a demurrer in the action. It has nothing to do with what we are discussing, but I wanted you to see it so you don’t make the same mistake the attorneys at Berman DeValerio made. Well, it’s not so much a mistake, per se, ab initio, but they prepared the proposed order and entitled the document “[Proposed] Order blah, blah, blah.” So far so good. The judge then reviews and signs the Order, and crosses out the word “proposed” in the name of the document. But then thinking that the footer has to exactly match the name of the document, the attorneys at Berman DeValerio (I’m guessing it was Daniel Barenbaum because he has a pretty high bar number, whereas Joseph Tabacco stated practicing back when IBM Mag Card typewriters were on the bleeding edge of technology, and he would therefore be very frugal with keystrokes) then put that exact title in the footer of every page in the proposed order. Poor Judge Kramer then had to cross out the word “Proposed” on every single page. No wonder it takes so long to get a case to trial in San Francisco. I never put the word “proposed” in the footer, and so far no one has ever complained.
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Posted in Anti-SLAPP motion, Case Results, SLAPP | Tags: Berman DeValerio, Daniel Barenbaum, Joseph Tabacco | 1 Comment »
Anti-SLAPP Negotiations Yield Faster Recovery of Attorney Fees and Better Client Service
What is the purpose of an anti-SLAPP motion?
Contrary to the seeming belief of some attorneys, the purpose of is anti-SLAPP motion is not just to recover attorney fees. Of course you should seek attorney fees after a successful anti-SLAPP motion, but the purpose of the motion is to extract your client from a wrongful and harassing lawsuit as quickly as possible.
Indeed, in a perfect world, when your client was served with a SLAPP, you would contact opposing counsel, instruct them on the error of their ways, and get a dismissal without ever having to bring an anti-SLAPP motion. In the real world, that’s not normally a viable option. Putting the opposition on notice that they have filed a SLAPP could afford them the opportunity to amend in order to change the nature of the action. Your effort to avoid further litigation could actually result in your client being trapped in an action that could have been disposed of with the anti-SLAPP motion.
However, after the anti-SLAPP motion is filed, the negotiations to end the action can begin. I have been successful in this effort on at least two occasions that I recall. I contacted opposing counsel, informed him of the attorney fees that had been incurred to date, and afforded the opportunity to settle the matter for the payment of those fees and costs before the case went any further.
I recognize that this approach is antithetical to many attorneys, who view an anti-SLAPP motion as an opportunity to run up the attorney fees. However, if the matter can be resolved early on, even before significant attorney fees are incurred, then that is always in the best interests of the client. Read the rest of this entry »
SLAPP003 – Anti-SLAPP Procedures and Strategies
A lot of useful information in today’s show, if I do say so myself.
We discuss anti-SLAPP procedures and strategies, and what you need to know about the 60 and 30 day deadlines for anti-SLAPP motions, and an easy and efficient way to protect your anti-SLAPP motion if the court clerk won’t set the hearing in 30 days or less.
I show you why it can be risky to amend a complaint, and why using a motion to supplement might be a better bet.
And we even discuss some tips for appeals and motions for summary judgment, as well as a free WordPerfect app for your iPad.
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Morris & Stone Victory – Reducing Attorney Fees
I am often brought in as an expert to oppose inflated attorney fee applications following an anti-SLAPP motion. Of course every case is different, but thus far I have never failed to get the requested fees reduced. Lest you be overly impressed, I will immediately note that I only handle a case if I agree that the attorney fees should be reduced. Sadly, there are far too many unethical attorneys who, after prevailing on an anti-SLAPP motion, view fee application as a winning lottery ticket, and greatly inflate the fees. In most instance my services are sorely needed to challenge the application, but there have been a few occasions where the fees being requested are reasonable in my opinion, and I inform the plaintiff and/or his attorney that I cannot opine that a reduction would be appropriate.
In today’s case, the fee application was of the all too common variety, where defense counsel grossly overstated the fees to which he felt entitled. In this case, the plaintiff had negligently filed a SLAPP, making the common mistake of seeking damages that flowed from fighting a legal action, claiming that the action was an “abuse of process.” When the defendant filed the anti-SLAPP motion, the plaintiff was educated as to the litigation privilege, and dismissed the challenged causes of action (others still remained). Rather than just bringing me in as an expert, the client decided to retain me to oppose the motion and prosecute the remaining causes. Read the rest of this entry »
Morris & Stone Anti-SLAPP Victory – Witness at EEOC Hearing Protected
Every week I get callers complaining about the anti-SLAPP statutes and/or the litigation privilege. The scenario is almost always the same. The caller sued someone for defamation for something they said in conjunction with litigation or an investigation by some government agency, and the caller was hit with an anti-SLAPP motion. The caller is outraged that the anti-SLAPP motion is keeping him from getting damages for the allegedly false statements made in court or court documents.
The outrage is misplaced, because the law is working properly by preventing the callers from doing what they are trying to do. The legal system cannot function without a litigation privilege. That privilege provides that anything said in conjunction with litigation is privileged, and cannot form the basis for a defamation action. And since the speech is privileged, a plaintiff can’t make an end run around the statute by just asserting different causes of action. I have written on this topic before, and the prior article shows what the justice system would be like without the litigation privilege.
Today I argued an anti-SLAPP motion in Los Angeles Superior Court, and the facts of the case provide a real life example of why the litigation privilege is so essential.
Let’s call the plaintiff in this case John. John decided one day that his employer was discriminating against him, and filed a complaint with the EEOC on that basis. There was then a dispute with his employer, with the employer saying John had violated a company policy and John denying that claim. The employer fired John for the alleged violation. John argued to the EEOC that the termination for the alleged violation was just more evidence of discrimination.
The EEOC investigated John’s claims of discrimination, and during that investigation interviewed our client, who also worked for the company. We’ll call him Dave. Read the rest of this entry »
Posted in Anti-SLAPP, anti-SLAPP motions, Case Results, Recent Cases, SLAPP, Victories | Tags: EEOC, Litigation Privilege | No Comments »
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