Court Decisions

Anti-SLAPP Victory — “If You Sue Me, I’ll Sue You!”

This case was especially satisfying because it was not a classic anti-SLAPP case involving defamation, but we persuaded the judge that the matter fell under the anti-SLAPP laws.

SLAPP stands for Strategic Lawsuit Against Public Participation.  A “SLAPP suit” is one designed to silence a defendant, to prevent him from criticizing the plaintiff or, in this case, to keep him from taking a matter to court.  Here, our (future) client had entered into a settlement agreement with the defendant in a prior action. The settlement agreement required the defendant company to pay damages to our client, and contained a confidentiality agreement. Two years after the settlement agreement was signed, the defendant had still not paid the damages to the plaintiff, so he retained our firm to sue to collect the money due under the agreement.

After the defendant company could not be persuaded to pay the money voluntarily, we filed an action for breach of contract, attaching a copy of the settlement agreement. The defendant answered the complaint and also filed a cross-complaint, claiming that it was a breach of the confidentially agreement to attach the settlement agreement to the complaint. Incidentally, counsel for defendant had discussed with me his intention to cross-complain on this basis, and I had warned him that would be a really bad idea. He did so anyway.

The reason the cross-complaint was a bad idea is because it was a SLAPP. Do you see why? Remember again what SLAPP stands for – Strategic Litigation Against Public Participation.  Defendant had breached the settlement agreement, so clearly we were entitled to sue for breach of that contract. That is the public participation – taking a case before a court for redress of a grievance.  By turning around and cross-complaining that our client had breached the agreement by revealing its contents in court, Defendant was in essence suing our client for suing.  Attempting to punish someone for suing should always raise SLAPP concerns, but defense counsel filed the cross-complaint anyway, even after my warnings. We filed our anti-SLAPP motion against Defendant/Cross-Complainant for the cross-complaint.

So let’s run this case through the two-prong, anti-SLAPP analysis. Our burden was to show that the speech was protected under the anti-SLAPP statute. The speech here was the complaint itself, with the settlement agreement attached. Filing a complaint is a specifically protected activity under the anti-SLAPP statute, and comments made in conjunction with litigation are protected under Section 47. There was no issue that our complaint was a protected activity.

That takes us to the second prong, by which the plaintiff, here the cross-complainant, must show a reasonable likelihood of success on the merits of the case, even if the speech is a protected activity.  Our client was required to keep the agreement confidential in exchange for payment of the damages. But the company never paid the money, so our client was excused from performance. Further, to sue for breach of contract, a plaintiff must allege the terms of the agreement. Here, there was no way to allege a breach of contract without specifying the terms of that agreement. The company argued we should have sought to bring the complaint under seal so no one would ever know the terms, but there is not such obligation required under the law.

But the company had an even more fundamental issue with its cross-complaint. The elements of a breach of contract claim are (1) a contract; (2) a breach of that contract; (3) performance by the plaintiff; and (4) damages from the breach. The company was alleging breach of contract, but it had utterly failed to perform. I attached a declaration from our client saying he had never been paid, and the company could say nothing to refute that point. Thus, the company could never prevail on its breach of contract claim because it could not satisfy the performance element.

The court granted our anti-SLAPP motion, threw out the cross-complaint, and the company is on the hook for more than $15,000 in attorney fees.

[UPDATE — October 14, 2011]  This was a strange case.  Despite the anti-SLAPP victory, counsel for the company just refused to acknowledge the findings of the court.  During settlement discussions, he would always bring up the fact that his client was going to sue for breach of contract for our disclosure of the settlement agreement, even though that claim had already been denied by the court.  He maintained this position right up to trial, offering on the courthouse steps to pay our client a fraction of what he was owed in exchange for a promise that the company would not sue on this non-existent claim.  When we refused, defendant responded by agreeing to a stipulated judgment in the full amount we were owed.  I suppose that the strategy was to wait until the last possible moment in the hope that we would blink (many attorneys will do anything to avoid going to trial, but I am not one of those attorneys), but since the agreement contained an attorney fees clause, all this accomplished was a much higher fee award.  To quote John Lennon, “Strange days indeed, most peculiar, Mama.”

Defamation Trial: Paralegal Taught Lesson in Reality

I am very selective with the cases I take, and will only represent the side of a case that should win if justice is done.  Out of the many cases I turn down every week, I know that most of the rejected clients will continue to call other attorneys until they find an attorney with less stringent standards; an attorney who does not understand defamation law and/or simply does not care about the merits of the case, so long as he is paid.  I then envision the horrible train wreck that is waiting at the end of that track.

Today I happened to come across a news story, reporting one of those train wrecks.

The case involved a scorned woman.  She worked as a paralegal, and ended up dating her attorney boss.  As is often the case when a supervisor dates a subordinate, the situation gets a little sticky when the employee is not doing her job, and the boss must discipline her.  In this case, according to testimony at trial, the paralegal made a serious mistake, and after the attorney blasted her over the mistake, she became so belligerent that he sent her home for the day to cool off.

The paralegal would have none of that.  She claimed that he had fired her, and sued for sexual harassment and wrongful termination, claiming that he terminated her because she would not continue a sexual relationship with him.  He claimed that he never fired her, and that it was he that had broken up with her because she kept telling him he was fat.  The attorney counter-sued the paralegal for defamation on the grounds that she was going around telling people that he was a sexual predator.

The result?  The jury rejected all of the paralegal’s claims, but awarded the attorney $1.15 million in damages for the defamatory statements.  As this is being written, the jury is in chambers, deciding how much to add to that figure for punitive damages.

Lesson to learn?  Make sure you can back up your version of the facts before venturing into the legal process, especially if you are contemplating suing an attorney. I never would have taken this case because of the huge holes in the facts. You say you were fired? Can you please produce the termination documents one would normally expect to see in the case of a termination? Had you reported this alleged sexual harassment to anyone prior to the day he sent you home?

[Update]  The jury came back and awarded $100,000 in punitive damages.  Counsel for the paralegal filed a motion for new trial, with a rather novel theory.  Her comments about the attorney being a sexual predator were made to other attorneys.  Therefore, her counsel argued, the comments should be protected by the attorney-client privilege.  Novel, but I doubt it will fly.

You Can Sue for Defamation in Small Claims Court

Wow. I may actually know what I’m talking about.

In one of my earliest postings on this blog, I recommended Small Claims Court to those who have been defamed, but can’t afford an attorney. In 2012 California raised the damages limit in Small Claims Court to $10,000!  Obviously this is not the way to go if you have a case with significant damages, but often the damages are minor, or damages are simply not the victim’s purpose in bringing suit. I suggested that an action in Small Claims Court can be an effective way to stop someone from continuing to defame you, and permits you to respond to anyone who asks you about the rumor, that you sued the defamer in court and won.

I had some secondhand knowledge of defamation actions being brought in Small Claims Court, but since attorneys are not allowed to represent clients there, I will never be able to test my theory directly. I’ve also been slightly concerned because I have received a couple of emails from readers who say that they were informed by a court clerk that defamation actions cannot be pursued in Small Claims Court.

Thankfully, a reader of my original posting was kind enough to call and spend some time on the phone with me, talking about his experiences. A vicious rumor got started about him some time ago, and like the urban legends that reappear periodically on the web, every few months the rumor about this person grows legs and starts getting spread again. Fortunately, because his professional circle is somewhat small, eventually the rumor reaches people that report back to the victim. He then brings a Small Claims action against the defamer, and has a witness to the statements.

This caller has brought four such actions, and has won every time. The judgments are small, but for the caller, damages were not the goal. He has found that the suits tend to eradicate the rumor in the community pockets surrounding the person who was spreading the lie. In other words, having lost in court, that person then goes back and tells the same people about the lawsuit. No doubt, the story is not told in flattering terms. Most likely the story goes something like this:

“Joe is such an asshole. I told Dave about how I had heard that Joe was stealing from clients, Dave told him what I said, and Joe sued me in court. The judge awarded him $2,500, so now I have to write him a check for $250 every month until it is paid off.”

But despite how the story is being told, the fact is that the people hearing the story are walking away knowing that it was a lie to accuse Joe of stealing, and Joe won’t put up with the lie being told.

This caller’s successes illustrate a couple of points. First, a “republisher” of a defamatory statement – one who simply repeats what he was told – is as guilty as the person who started the false rumor. Our hypothetical Joe may never learn who started the original rumor, but going after those who are repeating the lie is like a firefighter starting a backfire to stop a fire. It can help to stop the spread of the rumor, and may get back to the person who started it and cause him to shut up.

Secondly, and more to the point of this article, you can sue for defamation in Small Claims Court, regardless of what the court clerks may be saying. As I explained in the original article, a judge in Small Claims Court cannot give any equitable relief. In other words, he or she can’t order the defendant to stop spreading the rumor, or to provide a letter of apology, for example. That is why attorneys often don’t think to suggest Small Claims Court, and may be why the clerks think defamation actions cannot even be brought there. (Actually, a Small Claims judge can grant certain limited equitable relief, mostly having to do with contracts, and can condition an award on an act. He could, for example, award $2,500 in damages, reduced to $1,500 if the defamatory statement is removed from the Internet.)

And there are other big advantages to Small Claims Court. In many defamation actions, the specter of an anti-SLAPP motion looms large. If you sue for defamation and the defendant successfully brings an anti-SLAPP motion – convincing the court that the speech was protected – you get to pay the other side’s attorney fees. You are safer from an anti-SLAPP suit in Small Claims Court, and in any event there likely would be no attorney fees. (There are almost no absolutes in the law, so although very unlikely, I am not saying someone could not come up with a way to bring an anti-SLAPP motion in small claims court, such as having the action reclassified to Superior Court, or by bringing an oral motion at the time of trial.) Further, you cannot be sued for malicious prosecution if you lose on a Small Claims action.

With all this said, you’ll be wasting your time in Small Claims Court if you think you can go in and wing it.  You’ll be suing for thousands of dollars, so it will time and money well spent if you buy and review Everybody’s Guide to Small Claims Court in California.

[Update] I had recommended to another caller that her case was perfect for my Small Claims approach. She said the defamer would not stop defaming her, so I suggested that each time she learned of another defamation, she should drag him to court again. She took my suggestion to heart, and has sued him numerous times, and has prevailed every time, with total damages approaching $50,000. As you can see, a Small Claims action is not only a very streamlined and cost effective way to proceed, it can also be very lucrative.

[Update] As I predicted in my parenthetical above, a caller advised me that he was threatened with an anti-SLAPP motion in response to his small claims case. He added that he had gone to court to observe other cases as a way to prepare for his own trial, and he observed a judge grant an oral anti-SLAPP motion in a small claims case.

Single Publication Rule Found to Apply to Internet

Internet Defamation Single Publication Rule

I get calls every week from people wanting to sue for defamation for something that was said in a declaration. The declaration may have been filed in support of a restraining order, or in family court where parents are fighting over custody of their children. The declaration includes terrible lies about the caller, so he or she wants to sue for defamation.

No can do.

For a statement to be defamatory, it must be unprivileged. Public policy and statutes create a number of privileges that keep a statement from constituting defamation. For example, in California, and likely every other State, a statement made in conjunction with a legal action is privileged, and therefore immune from any claim of defamation. It may be hard to swallow that people can lie about you in a declaration and yet be immune from a claim for defamation, but it has to be that way. Imagine the backlogs that would occur in the courts if every declaration filed yielded another lawsuit for the lies allegedly told in the declaration. Indeed, if suing for something said in a declaration was permitted, then you would be compelled to sue every time the other side filed one. After all, if you didn’t, the Court would have to view that as an admission. Of course, the newly filed lawsuit would generate declarations, so that person would now file another lawsuit, and so it would go, ad infinitum.

When I explain this reality to callers, I generally get a response that goes something like this:

“So you’re telling me, she can say ANYTHING she wants to, and there’s NOTHING I can do about it?! She can claim I’m a murderer, and I just have to take it. She can claim that I rob banks and molest my children, and I just have to smile. Is THAT what you’re telling me?”

No, that’s not even close to what I am telling you. You can’t sue for defamation, but that doesn’t mean you have to take it. You don’t need to file a separate lawsuit for something said in a declaration, because you are already IN a lawsuit. That’s why litigation is called an adversarial system. Your ex-wife files a declaration saying you beat the children, you respond by filing your own declaration saying you don’t, supported by additional declarations from friends and family saying they have never seen you mistreat your children.  Every trial involves witnesses testifying to very different versions fo the facts, and the judge has to decide whom to believe.  Conflicting declarations are no different.

Plus, lying in a declaration is called perjury. That’s a crime. So, your spouse doesn’t get to say ANYTHING she wants, because she can go to jail. Admittedly, declarants are seldom prosecuted for perjury, but if they tell lies, they lose credibility with the judge and lose the case because your skilled attorney will show them to be the liars they are.

So, back to the Wisconsin case.

The case involved a defamation action against the Milwaukee Brewers and its longtime radio commentator, Bob Uecker. In 2006, Uecker sought an injunction against someone named Ann Ladd, claiming Ladd was harassing him. Ladd was charged with felony stalking around the same time. That criminal charge was dismissed, but the civil court issued the injunction requested by Uecker against Ladd.

Ladd then filed a defamation lawsuit against Uecker, claiming the declaration he provided in support of the injunction was defamatory. But we know a declaration filed in court can’t be defamatory because it is privileged. The judge knew that too, and held that the allegations failed to state a claim because they were privileged. (See, I don’t make this stuff up.)

But as judges often do, he continued to analyze the case under other considerations. The declaration by Uecker, which is a public document, had been published on the Internet at thesmokinggun.com. Ladd was suing for that publication, but it had occurred more than two years prior to the time she brought her action, and would therefore be barred under Wisconsin’s statute of limitations. Ladd argued that the statute had not run, because the declaration was still available on the site, and that every time someone saw the continuing publication, that started a new limitation period.

The court did not agree. It chose to follow the “single publication rule” which holds that, like something published in a newspaper, an article published on the Internet starts the statute of limitations clock running, and that clock is not reset every time someone sees the article, or even when it is republished by another site. If such were the case, the statute of limitations would go on forever on the Internet.

Morris & Stone Victory — Another Blow Against Internet Defamation

Defamation of Character on the Internet
A hard-fought victory for free speech.

The defendant in this case was Elvia Orrillo-Blas, MD, an emergency room doctor at a hospital in the Inland Empire. When it was decided that her annual contract to provide services to the hospital would not be renewed, she took to the Internet, posting multiple defamatory messages on Craigslist.com about the director she felt was responsible for the decision not to renew her contract.  In the anonymous postings, she would sometimes pretend to be a nurse or patient at the hospital when making her false claims about the director.  The director retained us to sue for Internet defamation.

One problem we had to overcome in order to prevail in this action was the fact that the director was so well regarded that witness after witness talked glowingly about him during the trial. That was great to show the falsity of the statements published by the defendant doctor, but it also showed that the Plaintiff had not suffered a significant loss of reputation since the witnesses still loved him. The jurors later explained that this love-fest was the reason they awarded a relatively moderate amount of compensatory damages, but during the trial this left me to wonder if they were fully appreciating the malice behind what defendant had done.

Not to worry; the jury came roaring back in the punitive damages phase and made very clear with the amount of punitive damages that the defendant doctor needed to be punished for her conduct. In closing argument I had explained that cases like this actually promote freedom of speech and the marketplace of ideas that we hold so dear in America, because those ideals are not served by knowing falsity. The jury apparently agreed.

As the icing on the cake, the judge then granted our request for injunctive relief, prohibiting the doctor from defaming our client in the future.  Although each instance of defamation is actionable, repeatedly suing a serial defamer is not the best solution because of the expense and delay in getting to trial.  With an injunction from the court, the doctor can actually be jailed if she repeats her false claims about our client and is found to be in contempt of court for defying the court’s order.

Communications Decency Act Still Unknown to Many Attorneys

 

Internet Defamation Go Daddy Girl

It seems like every few weeks I have to rail against a lawsuit I read about, wherein the attorney representing the plaintiff brings an action that is clearly barred by the Communications Decency Act.  In this latest installment, we find a New York attorney who represents plaintiffs who appear to have a solid case against some individual defendants resulting from some truly horrific defamation on the Internet.

But the attorney could not leave it alone.  I can almost see his mind working.  He thinks to himself, “these individuals will never be able to pay the judgment, so I’d better look around for some deep pockets.”  So, in addition to the individual defendants he names ning.com, wordpress.com, twitter.com, and my personal favorite, godaddy.com.

I sometimes use the analogy that naming a Internet Service Provider in an Internet defamation action is akin to naming Microsoft as a defendant because the defamer used Word to type the defamatory statements.  I never thought any attorney would actually go that far, but the attorney in this case surpasses even that far flung analogy.  I know it’s a foreign concept to some attorneys and their clients, but a defendant should only be held liable for damages if he, she or it has done something wrong.  Here, twitter.com is named because the defendants sent out “tweets” sending their followers to the defamatory content.  Godaddy.com is named because the defendants obtained the domain name there, and then set it to forward to their blog on wordpress.com.  How could these companies possibly be liable?  Well, according to plaintiffs and their attorney, they are liable because what the defendants did amounted to an “irresponsible use of technology.”

Apparently, in this attorney’s world, we have gone beyond even requiring that the website provider check the content of every web page posted on its server.  Now it is also the obligation of twitter.com to review and authorize every tweet that is sent, and godaddy.com must view with suspicion every account that sets a domain name to forward elsewhere.  Clearly there could be no Internet if such duty and liability could be imposed.

In (very slight) defense of the attorney, he does allege that these companies were informed of the nefarious use of their services, and did nothing to block the content.  Among the public there is an urban legend that a company becomes liable once it is informed that it is being used to distribute the defamatory content, but an attorney should know better.

A copy of the complaint can be found here, and a detailed article about the case can be found here.

More Judges Catching Up to the Times

 

Internet Defamation Blog

Trials are decided by humans with all their human experiences.  Whether a judge or jury is deciding a case, your relative success will depend on the nature of those experiences, and your ability to persuade the trier of fact to set them aside when appropriate.  Internet defamation cases necessarily require some understanding of the Internet by the trier of fact, or at least the willingness to absorb new concepts.  Thankfully it has not happened to me in any of the cases I have handled, but I still hear horror stories about judges who make comments like, “no one really believes anything they read on this . . . In-ter-net,” or “what is this google you keep talking about?”

At least a Small Claims Judge in Canada appears to understand a thing or two about Internet defamation.  In the case, the defendant took a disliking to a local dog kennel for whatever reason.  She visited some animal discussion boards, and posted comments about the kennel, referring to it as a “puppy mill.”  The kennel took exception to this characterization, and sued for defamation in Small Claims Court.  (In one of my earliest postings, I sing the praises of suing for defamation in Small Claims Court.  Take note how effective that can be.)

The court found in favor of the Plaintiff dog kennel, and awarded $14,000 in damages.  The court correctly determined that calling a dog kennel a “puppy mill” is a bad thing.  But what caught my eye was the simple logic of the judge, the sort of logic that sometimes eludes other judges.  First he was upset that these postings were made on the Internet, recognizing that “the use of the Internet worsens the defamation.”  That may seem extremely self-evident to most of us, but remember those aforesaid judges that still view that Internet as a fad among kids that will soon pass.  The judge also stated that the defamation was “particularly malicious” because the purpose of the defendant was to put out of business a kennel that supported a family of 11.

Wow.  A judge that recognizes that Internet defamation can be more egregious than verbal defamation, and who views the conduct from a real world perspective of how it impacts the people behind the business.  Thank you Canada.

No, I Wasn’t Kidding About the Wisdom of Walking Away

Internet Defamation - Take the Settlement Fool

Just two weeks ago I posted comments on the wisdom of taking a walk-away settlement when you are a defendant with no moral high ground in a defamation action.  I told the story of how the defendant in the case I prosecuted was afforded the opportunity to take down the defamatory comments and walk away without paying any damages, rejected it, and now must pay over $200,000 to my client as a result of his hubris.

You’d think that might have at least given the defendant and his counsel in a different case a moment of pause in the trial that followed two weeks later.  My client sued the defendant, who then filed a frivolous cross-complaint, apparently thinking that would give him some leverage.  The parties had discussed settlement throughout the year-long litigation process, but the defendant had always insisted on money coming his way, and there was no way that was going to happen.

Come the day of trial, the judge conducted one final settlement conference, and my client, knowing the defendant doesn’t have much money anyway, graciously offered to just walk away.  There it was; that same moment in time discussed in my last posting, where the defendant is afforded the opportunity to avoid sending his life, or at the very least his finances, in a bad direction.  But the defendant refused and demanded payment of a ridiculous amount of money on his ridiculous claim.  My client declined.

With no settlement, the case proceeded to trial and I called the defendant as my first witness in a trial that both sides had estimated would last three days.  Two hours into my examination, the judge spontaneously announced that he had heard all he needed to hear, and unless defendant had some “miraculous evidence” he was going to find in favor of my client.  In chambers, he said to defense counsel, “Mr. Morris is very methodically cutting your client to pieces.”  He suggested the parties and attorneys talk settlement again.  My client said fine, and said he would dismiss the action in exchange for defendant paying the same ridiculous amount defendant had been demanding.  Defendant agreed, and we set up a ten year payment schedule, non-dischargeable in bankruptcy.  Ouch.

If you got the tie-in between the photo above and the article, give yourself a prize.  It’s from the movie The Road Warrior, and the gentleman in the photo is imploring the people at the oil refinery to “just walk away” and let him and his warriors take the gasoline.  I think I may start dressing like that for settlement conferences.

Tony La Russa Drops Action Against Twitter

Tony La Russa

Even when a lawsuit is weak on merit it sometimes achieves its purpose.  I will have no part in filing a meritless lawsuit, but sometimes it is appropriate to push the envelope.

Take the case of Tony La Russa, famous baseball manager.  Like so many other well known people, someone hijacked his name and image on Twitter, leading many “followers” to believe that the musings coming from this Twitterer (Twitterite?) were coming from the real deal.  La Russa tried to persuade Twitter to intervene and remove the fake identity, but sure as there is a fail whale, the fine folks at Twitter refused to cooperate.

La Russa filed suit and got a lot of grief for doing so, with most legal experts citing the Communications Decency Act (CDA) as a barrier to the suit.  But, obviously, this is not a typical CDA situation.  Yes, La Russa was seeking to hold Twitter liable for the “postings” of third parties, and that is classic CDA material.  But there are some interesting side issues.  For example, a website cannot encourage visitors to post copyrighted e-books for download and then expect to escape liability under the CDA because third parties are the ones actually posting the books.  In that case, the Digital Millennium Copyright Act would trump the CDA.  Like a copyright, people have a pecuniary interest in there own identities.  Should Twitter be permitted to assist in those that would steal that identity?

The La Russa case will not be providing any answers to this question, because it has been withdrawn, but not before Twitter deleted the offending account.  Most are reporting this story as a victory for Twitter, but didn’t La Russa get exactly what he asked for in the first place?

For more on this story, go here.

An International Context for the Single Publication Rule

I’ll return to explain the concept in more detail, but here is an article that very nicely summarizes the competing international approaches to the American Single Publication Rule.

Aaron Morris

Morris & Stone, LLP

Tustin Financial Plaza
17852 17th St., Suite 201
Tustin, CA 92780

(714) 954-0700

Email Aaron Morris

View Aaron Morris, Trial Attorney and Partner at Morris & Stone, with emphasis on Free Speech and Defamation Law.

Section 6158.3 Notice

NOTICE PURSUANT TO BUSINESS & PROFESSIONS CODE SECTION 6158.3: The outcome of any case will depend on the facts specific to that case. Nothing contained in any portion of this web site should be taken as a representation of how your particular case would be concluded, or even that a case with similar facts will have a similar result. The result of any case discussed herein was dependent on the facts of that case, and the results will differ if based on different facts.