Our neighbors to the North are very American-like, until you get to issues of free speech. Most view Canada as the “least protective of free speech in the English-speaking world.” Reasonable minds can differ on some of Canada’s laws, such as prohibiting the media from identifying criminals until they have been convicted, but most of the law is still based on policies designed to prevent any criticism of the government. Canadians can be held liable by English-Canadian courts for comments on public affairs, about public figures, which are factually true, and which are broadly believed.
A recent parody video posted on You Tube illustrates just how lacking the concept of free speech is in Canada. The video is a fake cable company ad posted by Extremely Decent Films. It does not mention any cable company by name, and indeed it is specifically directed at American cable companies. Nonetheless, someone lodged a complaint in Canada, and that was sufficient to scare You Tube into removing the video, given the vagaries of Canada’s libel laws (although the video has since been reposted in response to articles such as this one).
It is never defamation to report a fact, even if that fact is that a person was charged with a crime they did not commit. I understand why callers sometimes don’t understand this distinction. The completely innocent caller was falsely arrested, so it seems like a newspaper that reports the arrest is somehow making a false statement that the caller committed a crime. But look closer, caller. The paper did not report that you committed the crime, the paper reported that you were ARRESTED for the crime. Truth is an absolute defense to any defamation claim, and it is true that you were arrested.
What I don’t understand is how so many attorneys miss this point and pursue doomed defamation claims for their clients.
A recent example of this that caught my eye is a case out of Nevada. As reported by the Las Vegas Sun, the accounting firm of Deloitte & Touche was hired to perform an audit of a company called Global Cash Access Holdings, Inc., which is a publicly traded company that provided cash access services to the Nevada gaming industry.
The accounting firm uncovered information from an FBI bulletin which claimed that the two men who founded the company – Robert Cucinotta and Karim Maskatiya – were involved in criminal activity. As they were required to do by law, Deloitte & Touche disclosed this information to the audit committee. Cucinotta and Maskatiya were not happy with this disclosure, and felt it amounted to defamation because they were never convicted of any crimes and there was no evidence that they did anything criminal. They sued Deloitte & Touche, claiming that the disclosure cost the company $400 million in market capitalization and cost them $100 million personally.
But can you see why the comments by Deloitte & Touche were not actionable defamation? The accounting firm simply reported information that was contained in the FBI bulletin, as it was required by law to do. Certainly if those allegations against two principals of the company proved to be true it would greatly impact the value of the company, so that information was quite properly reported.
The Nevada Supreme Court, in a decision written by Justice Michael Cherry, said, “We agree with our sister jurisdictions that those who are required by law to publish defamatory statements should be privileged in making such statements.” In this case the court said Deloitte’s communication to the audit committee of the cash access company was required by the federal securities law.
As the old saying goes, if a tree falls in the forest and no one is there to hear it, does it make a sound?* In the context of defamation law, the saying could be, “if no one knows it’s you, is the statement still defamatory?” The answer is no.
I get a surprising number of calls like this. Now that anyone can publish a book with a few mouse clicks, more people are publishing their life stories, and those stories always manage to irritate someone. That someone then calls me, stating that some person in the book is them, and they want to sue for defamation. They go on to explain that the name given is not theirs, that the geographic location given is someplace they have never lived or visited, and the gender has been changed, but they know it’s them and damn it they want to sue. In some cases it is clear that the caller made the whole thing up in their mind, but in other cases it is clear that the person referenced really is the caller. Even so, if the author changed the identity so much that no one would recognize them, there is no case.
Today’s example involves rocker Sammy Hagar. He wrote a book called “Red: My Uncensored Life in Rock“, which tells a story of a woman he had sex with following a concert, who later claimed to be pregnant. He explains that he paid her some support during the alleged pregnancy, but that no child was ever born and he now thinks the entire thing was simple extortion. Had he named her, that would have supported a claim for defamation since he accuses her of a criminal act, but she is identified only as a “Playboy bunny from California”. Apparently the woman in question was a Playboy bunny, but Hagar changed the state from Michigan to California, perhaps specifically to make her less identifiable.
Nonetheless, the still unidentified “Playboy bunny from California” sued Hagar for defamation and infliction of emotional distress. Not surprisingly, the trial court today threw out the case.
U.S. District Court Judge Linda Reade ruled that Hagar did not defame the woman because he did not refer to her by name in the book – identifying her erroneously as a “Playboy bunny from California” – and the woman did not prove she suffered any financial, reputational or emotional injuries from his statements. Only individuals who already knew about their relationship, not the general public, would have understood Hagar was referring to her in the book, she added.
Although Hagar’s statements in ‘Red’ brought back painful memories for Doe, the evidence does not support a finding that Hagar’s conduct was extreme enough to permit the court to find outrageous conduct sufficient to support Doe’s intentional infliction of emotional distress claim, Reade wrote.
* It’s a deep thought, but I’ve always thought it was kind of silly because of course a falling tree makes a sound. The laws of physics don’t stop just because no one is there.
I just wish counsel would run their defamation cases past me before filing. Here is a tale of a SLAPP that should have been spotted a mile away.
The tale starts with an article in OC Weekly. The article was about a guy named Shaheen Sadeghi. The article was extremely favorable to Sadeghi, referring to him as the “Curator of Cool” and discussing his amazing success in Orange County. OC Weekly even put his visage on the cover of the paper. Truly, it was a positive article that most would kill for.
But everyone has their detractors, and Sadeghi’s was a woman named Delilah Snell. After disclosing that Snell happens to be the girlfriend of a OC Weekly editor, the article reports on a dustup between Snell and Sadeghi, as told by Snell. Here is what the article said:
Still, some say Sadeghi will do whatever it takes to succeed. Delilah Snell, owner of Road Less Traveled, a shop in Santa Ana that sells environmentally friendly gifts and home goods, met with him in 2008 to discuss an opportunity to move to the Camp. (Full disclosure: Snell is the girlfriend of OC Weekly editor Gustavo Arellano.) She says the rent rate he gave was way too high, at least triple what she was paying, and she declined the offer. Then, she claims, he made a threat. “He basically said to me, ‘If you don’t move into my center, I will copy your business,’” she says.
Snell, co-founder of the Patchwork Indie Arts & Crafts Festival and a pioneer in Orange County’s eco-movement, believes her store is the model for the Camp’s SEED People’s Market, an airy, 12,000-square-foot gallery-type outlet that sells sustainable products and handmade crafts. Sadeghi owns the store with his wife, Linda. Snell claims that SEED has approached many of the vendors featured at Road Less Traveled and even used a photo of her shop in a promotional email sent out to customers. (The Weekly has a copy of the email.)
The article then goes on to tell Sadeghi’s side of the story:
Of Snell’s accusations, Sadeghi responds, “I think she’s full of it.” He says his business plan for SEED was dated “five years before she developed a business plan.”
“It’s a whole different store, whole different vibe,” he says, “and it has nothing to do with Road Less Traveled.”
The article then returns to singing the praises of Sadeghi, providing examples of how he is beloved by his tenants at his business centers like The Lab in Costa Mesa.
Sadeghi sued Snell in Orange County Superior Court, alleging in his complaint that Snell “orally accused Mr. Sadeghi of threatening to copy Ms. Snell’s business idea and plan if Ms. Snell did not move into Plaintiff’s retail center.” Sadeghi then alleged causes of action for slander, slander per se, libel, libel per se, invasion of privacy/false light, intentional interference with economic prospective advantage (sic), negligent interference with economic prospective advantage (sic), unfair competition, and injunctive relief. Whew! All arising from the statements Snell allegedly made to the OC Weekly, claiming that Sadeghi had said “If you don’t move into my center, I will copy your business.”
A Quick Aside to Discuss the “Wall of Wrong”.
A potential client will call me, and during the call will tell me about 20 evil deeds committed by the defendant. They have been horribly wronged, and they want to sue. Fair enough, but for a legal action each wrongful deed must be viewed independently to determine if it is actionable. I call the wrongful acts the “Wall of Wrong”, and each wrongful act is an item on that wall. I explain to the client that to determine if there is a case, we must walk up to the wall, take down each item and examine it independently to see if it will support an action. If not, it is tossed away never to be discussed again.
The reason this exercise is so important is because the client has a perception of being slammed by the defendant, and is absolutely convinced that all that wrongdoing must equate to an action, but when all the conduct that does not support the action is stripped away, the client will often see that what is left remaining is pretty petty.
So let’s take Mr. Sadeghi to the Wall of Wrong to see if he has a defamation action. In his case, there are only two items: (1) the claim that he was going to copy Snell’s business, and (2) that he pressured Snell to lease space in his center with the aforesaid threat. Let’s take those items off the shelf one at a time and decide if they will support a suit.
“I will copy your business.”
Sadeghi alleged that he never made this statement. So, is it defamatory to falsely claim that someone said you were going to copy their business? Of course not. It does not accuse Sadeghi of any wrongdoing. As the court put it in granting the anti-SLAPP motion, “Pepsi copies Coke. Gimbel’s Copies Macy’s. This is the nature of business.” Take that statement from the Wall of Wrong and never speak of it again.
Pressuring Snell to lease space.
Is it wrong to pressure someone to lease space? Of course not. Is it wrong to say you will copy their business if they don’t lease space? Let’s consider that one for a moment by using an analogy. Let’s say you have a chain of pizza restaurants, and a landlord comes to you and says, “we really want a pizza place like yours in our center, so we just want you to know that if you don’t lease the space, we’re going to create a pizza place just like yours for our center.”
Anything wrong with that? Sure, he’s pressuring you to rent the space with the threat of opening a competitor if you don’t, but that’s fair. When a landlord is looking for an anchor store in their mall, don’t you think they play Macy’s and Bloomingdale off one another? Take that statement from the Wall of Wrong and never speak of it again.
We are left with nothing to support the action, and it should not have been filed. The trial court was correct in granting the special motion to strike.
A SLAPP is not saved by numerous theories.
The other essential takeaway from this case is that nine causes of action do not a case make if the basis for the action is defective. In other words, if it was not defamatory for Snell to claim that Sadeghi said “If you don’t move into my center, I will copy your business,” then those words will not support any other legal theories like intentional infliction of emotional distress or unfair competition.
An interesting defamation case out of New York, involving the world of music and illustrating the burden of proof.
As explained here on various occasions, truth is a defense (a point sadly lost on many defense attorneys). Thus, the burden of proof is on the defendant to show the truth of whatever it is he said or published.
In one of our recent cases, the defendant falsely stated that our client had cheated customers. Throughout the case, no matter how many times I explained to defense counsel that it would be his burden to prove that my client cheated customers, he kept responding, “you’ll never be able to prove that your client didn’t cheat customers.”
Really? My client took the stand and testified that he has never cheated a customer. That’s all it takes. The defendant then had the burden to prove the truth of the statement, and could not name a single customer our client had cheated. Judgment for plaintiff.
In today’s case, Tom Scholz, guitarist from the 70′s rock band Boston, sued the Boston Herald newspaper, claiming that certain articles falsely claimed that he was responsible for the suicide of fellow band member Brad Delp in 2007.
The judge in the case dismissed the action, because although it is the burden of the defendant to prove the truth of the statement, the judge concluded that the truth or falsity of the statement could never be determined. He didn’t use this example, but to borrow an example from that era, it’s a little like blaming Yoko Ono for the break-up of the Beatles, when John Lennon isn’t here to testify. The judge ruled that why Delp killed himself will forever be an imponderable, making any statement about the suicide merely an opinion, and opinions are not actionable.
Perhaps because the adrenaline and endorphins flow during a courtroom battle, I become very thoughtful in the calm that follows. I won a small but satisfying court victory recently in an Internet defamation case, and it made me realize how much the process mirrors a scene from a movie.
The movie is Taken. Even if you haven’t seen the movie, you probably saw the scene to which I refer since it was shown in the trailers. The main character, who we come to learn is some sort of retired Über-spy, is on the phone with his teenage daughter when she is kidnaped. He hears the bad guy pick up the phone, and he calmly gives the following speech:
I don’t know who you are, and I don’t know what you want.
If you are looking for ransom, I can tell you I don’t have money.
But what I do have are a very particular set of skills;
skills I have acquired over a very long career.
Skills that make me a nightmare for people like you.
If you let my daughter go now, that will be the end of it.
But if you don’t, I will look for you, I will find you and I will kill you.
Most every Internet defamation case I handle starts with such a moment. Not nearly so dramatic, of course, and there are no deaths involved if the defendant doesn’t listen to me, but the concept of a choice is the same.
Most of my defamation clients aren’t seeking money initially; they just want the bad guy to stop defaming them. My marching orders are usually just to get the person to take down the comments. So I write to the bad guy, explaining that this does not need to go any further. He strayed from the path and said and did some things he shouldn’t have, but if he just takes down the posts and walks away, “that will be the end of it.”
That is the moment in time. I am affording the prospective defendant the opportunity to avoid sending his life in a bad direction. I am less of an advocate and more of a caregiver, just trying to convince the patient to stop engaging in self-destructive behavior. But he makes the ultimate decision whether to accept that help, or to continue on his path.
In Taken, the kidnapper could not help himself and responded by saying, “good luck.” He did not take the skill set seriously enough, thinking he would be impossible to find. Today’s defendant also did not take the skill set seriously enough, thinking since he lived across the country we would never pursue him. He was one of a few on-line competitors with my client, and had engaged in some trash-talking that escalated into defamatory comments about my client’s business practices. All he had to do was take down the false statements and walk away and that would have been the end of it. He refused, and today a judge ordered him to take down the false statements, never to make the statements again, at risk of fines and imprisonment, and to pay my client over $200,000.
Pick your battles. If you want to take on a plaintiff that you feel is trying to shake you down, then I’m with you one hundred percent. But don’t get into a court battle just to prove who has the bigger . . . lawyer. The defendant in this case had no moral high ground. He knew what he was saying about my client was untrue, so why on earth wouldn’t he take the opportunity to walk away? As a famous philosopher once sang, “You’ve got to know when to hold them, know when to fold them.”
In this case, we represented a business and the individual who owns that business. The defendant, a medical doctor named Pankaj Karan, was starting his own business, MDTelexchange, and traveled to an overseas company also owned by our client (we’ll call that the “foreign company”) and entered into a contract for the creation of some custom call center software.
And that is where the divergence in the two versions of the story begins. Our clients asserted (and proved at trial) that the working software was delivered on time by the foreign company. The defendant, Dr. Karan, claimed otherwise, and blamed the failure of his start-up company on the software.
Dr. Karan’s claims never made sense, because while the software would have been useful in his business, it was in no way essential. Blaming the software for the failure of the business was akin to saying a business failed due to a lack of business cards. But for whatever reason, Dr. Karan chose to blame our clients, and in an email announced that he was going to “work night and day to inflict the maximum amount of financial pain that is allowed under the law.” To that end, he ignored the fact that his contract was with the foreign company, and instead attacked our client personally, along with his other company, taking to the Internet to trash their reputations.
This is a scenario that I see over and over in defamation cases. Someone becomes unhappy with a business or individual, and decides to criticize them on-line. It might even begin with a laudable motive – just putting out the word to the public to avoid a business that did not satisfy the critic. I would defend to the death the right of anyone to go on line and publish a legitimate criticism of a business.
But something happens that takes the person beyond a legitimate review. As the person types the words, he or she decides it’s just not stinging enough and won’t cause enough harm. In this case, Dr. Karan must have felt that a legitimate review of the foreign company, stating that in his opinion the software did not work as promised or was not delivered on time, just wasn’t hurtful enough. He posted two articles on his own blog, and sent an email to our clients’ customers. In the email and postings, Dr. Karan’s comments had almost nothing to do with the alleged problems with the software. Indeed, he abandoned his claim that the software was late, and instead claimed that it had never been delivered at all. He added that our client had cheated an employer ten years earlier, and that his company had failed to pay vendors hundreds of thousands of dollars. Although our clients had never received a single complaint from a customer, Dr. Karan claimed that “they are swindlers of the highest kind and have milked many of their clients of money and time.”
At trial, Dr. Karan could not identify a single customer that our clients had “swindled”, he could not identify a single vendor they had failed to pay, could not specify how he had cheated his former employer, and acknowledged that the software was in fact delivered. Today, an Orange County jury, known for being very conservative with damage awards, awarded $1.5 million jointly and individually to both of our clients for the damage to their reputations and business, caused by Dr. Karan.
In a standard civil action, the plaintiff has the burden to prove the case. This is true in a defamation action as well, but since truth is a defense to defamation, the burden of proving a statement is true falls on the defendant. I can’t fathom how defendant thought he would get away with what he published in this email and on his blog, but I think he may have thought he would be safe because we could not prove a negative. In other words, how do you show that you have never defrauded any of your customers? Bring in every customer you have ever worked with to testify that you did not defraud them? That would be impossible, and that is why the law puts the burden on defendant to prove the TRUTH of the statements. Dr. Karan could not prove his statements were true.
Pankaj Karan was admirably represented at various times during the action by Randolph Catanese and Douglas Hume from Catanese & Wells, David R. Calderon from Barth, Berus & Calderon, and Palak Chopra from the Law Offices of Palak Chopra.
Our client in this case was Spencer Kobren, a well known Consumer/Patient Advocate, author and the Founder of The American Hair Loss Association. Besides hosting a weekly radio broadcast, Kobren also owns and operates the online message forum baldtruthtalk.com where hair loss consumers can discuss and share their experiences with product and service providers in the hair loss industry, as well as provide commentary and reviews of hair transplant surgeons in the field.
As most Internet savvy people now know, the Communications Decency Act (“CDA”) shields the operator of a website from any liability for comments posted on an open forum. When someone on Kobren’s forum posted critical comments about a Beverly Hills hair transplant surgeon, the doctor took exception. However, instead of contacting Mr. Kobren or his staff to ask for help in properly addressing negative comments posted by one of his former patients, the doctor decided to defame our client by posting completely fabricated reviews and comments on various blogs, review sites and social media sites, accusing Kobren of fraud, coercion, extortion, organized crime and the running of a criminal enterprise.
As an aside, some sites encourage negative comments, and have no concern as to whether or not they are true. Operators of these sites are also protected by the CDA, but knowingly allowing false and defamatory comments to be posted was not the intention of the CDA, and we will not represent a party who is using the CDA to that end. This was not that type of case. Spencer Kobren runs a very positive and useful board, and will intervene where appropriate when the content crosses the line.
Back to the story. Despite my repeated postings of articles about the wisdom of a walk-away, and even this one, which is almost identical to this case, some defamers feel they must show bravado, claiming they can prove the truth of all of their comments. It’s as though they never think it through until I serve the first set of discovery questions, which forces them for the first time to sit down and put in writing all the facts they are contending support the statements they made. I have this image in my mind of them sitting at their kitchen table, my discovery requests spread in front of them, and after about 45 minutes of trying to answer the questions and realizing that there is not one fact they can offer that would support the defamatory statements they made, saying to themselves, “Man, I am SCREWED!”
Such a moment must have occurred in this case. Defendant first did not even respond to the complaint, then he hired an attorney to undo the default, then he fired that attorney, and agreed to remove all the defamatory comments, never to speak ill of our client again, and to pay $150,000.
I occasionally post stories here that highlight what it is like to live in countries that do not recognize freedom of speech. My perhaps naïve hope is that if we recognize what a tremendous gift we have with our right of free speech, some who might be tempted to abuse that privilege with defamatory speech might act responsibly.
Today’s example comes from Palestine. I would not anticipate that Palestine would be a bastion of free speech rights, but if that government wants to cultivate sympathy and support, this is not the way to go about it.
The Palestinian Authority doesn’t permit criticism of the government, and this week arrested Abdul-Khaleq, a Palestinian woman accused of defaming President Mahmoud Abbas on her Facebook profile. What did she say to justify two weeks in jail while she was “investigated”? The university lecturer, a single mother of two children, reportedly accused Abbas of being a traitor and demanding he resign.
Perhaps worse from a free speech standpoint, this arrest is part of a growing crackdown on writers who condemn the West Bank government, and in one case a reporter was questioned over a story he was still in the process of researching. Apparently the government wants to silence speech before it is even spoken.
Appreciate what we have.
The California Court of Appeal recently 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. For reasons not important to the story, Dr. Nesson lost his privileges at a hospital. Dr. Nesson sought reappointment by the hospital and, after it was denied, filed a civil complaint. He retained counsel who either did not recognize the SLAPP aspects of the case or decided to take a run at it anyway, thinking they could successfully plead around them. (Which does not mean they did anything wrong, as set forth below.)
In the complaint, they alleged causes of action for: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) violation of Health and Safety Code section 1278.5; (4) violation of the Unruh Civil Rights Act; and (5) violation of the Fair Employment and Housing Act (FEHA). In summary, the grounds for Dr. Nesson’s claims were that the hospital had breached the Agreement by not giving him 30 days’ notice of termination, had retaliated against him for his complaints about patient safety, and had discriminated against him for a perceived mental disability or medical condition.
A very good try. Do you see that none of the causes of action mention defamation or any of the other causes of action that one normally associates with a SLAPP suit? Many defense attorneys would not have even spotted the SLAPP issues, and the matter would have proceeded. But here is today’s lesson. A SLAPP is a SLAPP is a SLAPP, and it doesn’t matter what you call the causes of action if the conduct arises from a protected activity.
I previously wrote about my successful anti-SLAPP motion against Freddie Fraudster, who fraudulently obtained a credit card under my client’s name. When my client reported the fraud to the bank, Freddie sued claiming that damaged his reputation with that institution. In response to my anti-SLAPP motion, he argued that my client’s communications to the bank were not protected because they were not part of any formal review process. Motion GRANTED, even though the report in question was not to any official agency.
So too, the attorneys defending against Dr. Nesson’s action did spot the SLAPP issues, and brought an anti-SLAPP motion. Dr. Nesson argued in response that his summary suspension and the subsequent termination of the Agreement did not constitute protected activity because the hospital was not involved in the peer review process or his summary suspension. Motion GRANTED, because it’s all part of the same protected activity.
The decision to suspend privileges triggers a statutory scheme for review of the decision under Business and Professions Code section 805, so the actions of the hospital and the medical examination committee were a normal part of that process. As I have repeatedly explained would happen, the trial court granted the hospital’s special motion to strike, finding that the contract termination was “inextricably intertwined with the . . . summary suspension, arose from, and was in furtherance of the protected activity.”
But what about the claim that he was terminated because of a perceived mental disability or medical condition? If he was discriminated against, how can that be protected by the anti-SLAPP statute? How can that “arise from” the protected activity? As the Court of Appeal explained:
“[T]he anti-SLAPP statute applies to claims made in connection with the protected activity, regardless of defendant’s motive, or the motive the plaintiff may be ascribing to the defendant’s conduct. (Navellier v. Sletten, supra, 29 Cal.4th at pp. 89-90.) The only alleged evidence or argument in support of his claim that the Hospital perceived Nesson as disabled are the facts that the Hospital received the written special notice of summary action and the notice of medical executive committee action suspension. Nesson contends “[b]ased on the above letters and a report from the MEC, the Hospital decided to terminate Nesson’s Service Agreement.” These letters and any alleged “report” are part of the peer review process.”
In defense of the attorneys, there were complicating factors here, and sometimes you have to push the envelope. That is how statutes are interpreted under the law. The discrimination claim might have survived if the evidence had taken the alleged discrimination outside the review process. Further complicating the matter, Dr. Nesson did not exhaust his administrative remedies, and that gave pause to the court since that made it impossible for him to show a likelihood of success on the action.