California Court of Appeal Affirms Defamation Decision: Court supports broad opinion protection and rejects survey evidence in establishing defamatory meaning
The California Court of Appeal issued a ruling on April 30 rejecting an attempt to prove the existence of a defamatory implication in a publication through use of a public opinion survey. The decision includes helpful language for defamation defendants regarding the broad protection afforded by the Constitution for opinion and the limited applicability of the so-called "commercial speech" exemption to California's anti-SLAPP statute, which was adopted a few years ago. The decision contains a thorough discussion of defamation by implication and will provide broad support to defend such claims against the media.
In Simpson Strong-Tie Co. v. Gore et al. (No. H030444) (Cal. Ct. App. April 30, 2008), galvanized screw manufacturer Simpson sued California attorney Ben Pierce Gore, a plaintiffs' class action attorney, over a legal advertisement Gore published in a local newspaper to locate potential plaintiffs for a class action lawsuit he intended to file. The ad stated that if a consumer's deck was built with galvanized screws manufactured by Simpson (or two other manufacturers), the consumer “may have certain legal rights and be entitled to monetary compensation, and repair or replacement of your deck. Please call if you would like an attorney to investigate whether you have a potential claim.”
Party seeking exemption from anti-SLAPP statute bears burden
Simpson promptly sued Gore for libel, trade libel, false advertising and unfair business practices. Gore filed a motion to strike the action as a SLAPP (strategic lawsuit against public participation). The trial court agreed, granting the motion in full. On appeal, as it had claimed in the lower court, Simpson argued that its lawsuit was exempt under Code of Civil Procedure Section 425.17(c), an exemption generically described by other courts as the “commercial speech” exemption to the anti-SLAPP statute.
The Court of Appeal initially examined whether a party claiming exemption from the anti-SLAPP statute has the burden of establishing the applicability of the exemption. The Court pointed to a “well-recognized principle” that those claiming an exemption from a general statute have the burden of proving that they come within the exemption. “For the purposes of this rule,” the Court stated, the anti-SLAPP law is a “general statute.” Therefore, the plaintiff bears the burden of showing that the act is exempt from the protections of the anti-SLAPP statute.
In making this determination, the Court disapproved a decision from another Court of Appeal—Brill Media Co., LLC v. TCW Group, Inc., 132 Cal. App. 4th 324 (2005)—that had placed the burden on the defendant seeking the protection of the anti-SLAPP statute to demonstrate that the exemption should not apply. The Brill Court of Appeal had reasoned that because in the first stage of the anti-SLAPP procedure the burden rests on the defendant to show that the acts about which the plaintiff complains were taken in furtherance of defendant's right to free speech, the defendant also bears the burden of showing that no exemptions to the statute apply. The Court in Simpson Strong-Tie rejected that reasoning, determining that it contradicted the long-standing rule that parties seeking an exemption have the burden of proving that they are entitled to the protection of the exemption.
Simpson could not show that the Section 425.17(c) exemption applied
The Court next criticized the characterization of Section 425.17(c) by other courts as the “commercial speech” exemption, describing it as “substantially overbroad.” The Court, in some detail, explained that the exemption applied only to statements that either (1) concern the speaker's or a competitor's products or services or (2) are made in the course of delivering the speaker's products or services.
Regarding the first point, the statement in Gore's ad plainly did not concern the products or services of Gore or one of his competitors; it involved Simpson's products—the galvanized screws. Accordingly, Simpson could not invoke the exemption on that basis. Regarding the second point, the Court stated that it applies only to statements made while the speaker is delivering a product or service that the speaker is in the business of providing. Because Gore, an attorney, is not in the business of selling advertising, he was not, through his advertisement, delivering a “product or service” within the meaning of the statute. Rather, he was only attempting to deliver his services. Such attempts to deliver services do not fall within the purview of the statute, the Court concluded.
“Commercial speech” exemption is not an anti-SLAPP safe harbor
On a broader level, the Court stated that it would distort the purpose of the exemption in Section 425.17(c) for Simpson to be able to use it to gain safe harbor from the anti-SLAPP statute. Tracing the legislative history of that statute, the Court stated that the exemption was enacted to protect public interest or consumer class plaintiffs from the growing misuse of anti-SLAPP motions by commercial enterprises seeking to impede or obstruct litigation brought against them.
Simpson sought to achieve the same results with the Section 425.17(c) exemption that commercial enterprises had earlier tried with the anti-SLAPP motion, a result the Court could not countenance. “Here a seemingly large commercial enterprise has attempted to use the new exemptions to perpetuate a lawsuit that may fairly be described as a paradigmatic SLAPP in that it plainly arises from conduct protected by the anti-SLAPP statute and, as will appear momentarily, lacks substantial merit,” the Court stated. “To permit this effort to succeed would be a perversion of legislative purpose at least as striking as the one that motivated the Legislature to enact the exemptions that Simpson invokes.”
Court rejects survey evidence to establish defamatory meaning
Immediately after Gore's advertisement began running, Simpson commissioned a professional public opinion survey regarding the purported effect of Gore's advertisement. Simpson sued Gore within a week after that survey was completed, claiming that Gore's ad implied that Simpson's galvanized screws were defective. Simpson relied heavily on the results of the survey to support its claim that the advertisement was defamatory, and also to establish that it had incurred special damages (required to allege a trade libel claim in California). On appeal, the Court found Simpson's use of the survey to be nebulous, especially because Simpson had phrased the survey responses to include the ambiguous answer that after reading the ad the consumer found it “somewhat likely” that Simpson galvanized screws were defective. The court explained:
The requirement of a provably false assertion of defamatory fact is ground in the constitutional entitlement to speak truthfully. That entitlement is not subject to defeasance by plebiscite, let alone by private opinion survey. It is for the courts, as guardians of our constitutional liberties, to say whether a statement is the type that will permit a judgment for libel. That function cannot be delegated to anonymous citizens questioned by anonymous interrogators in public parking lots.
Gore's ad constituted protected opinion, not an actionable false assertion of fact
In concluding that Gore's advertisement was not actionable, the Court affirmed the principle that a “false opinion” is not actionable under defamation laws and that a claim for defamation may only succeed if a plaintiff shows a “provably false assertion of fact.” Simpson's main claim of provable falsity, the Court stated, rested on the faulty premises that Gore's advertisement stated that Simpson's galvanized screws are “defective,” a term never used in the ad, and that screws are only “defective” if Simpson would be held liable in a products liability suit. “To the average reader of a general circulation newspaper,” the Court stated, “the meaning of ‘defective' is not determined by the laws of products liability but by common usage.”
Under this common usage standard, this advertisement did not brand Simpson screws as “defective,” the court stated, but at most suggested that some of Simpson's galvanized screws “were unsuitable for use in specified applications and that persons who used them might have a remedy against someone.” The ad therefore was not a provably false assertion of fact because it was “explicitly couched in terms not of fact but of possibility,” and the “law of defamation is concerned with perceived derogatory facts, not vaguely disquieting possibilities.” Moreover, regarding the claims in the ad of a possible right to legal relief, “it is explicitly predictive and thus cannot be understood to assert a proposition of fact because it is almost universally understood that no one knows the future.”
Many aspects of the Court's decision will be helpful to defamation defendants. In particular, the Court's strong rejection of survey evidence—frequently offered by plaintiffs to attempt to establish defamatory meaning—should be persuasive in other situations. In addition, the broad language used by the Court in rejecting the false implications Simpson attempted to draw from the advertisement should help defend against claims resting on predictions and possibilities, which, as the Court correctly found, are not the provable assertions of fact needed to make out a claim for defamation.
Co-authors Thomas Burke and Rochelle Wilcox represented Ben Pierce Gore et al. at all court levels.