Monday, June 13, 2016

A Fair Report Can Include Some Self-Promotion and Puffery

J-M Mfg. Com. v. Phillips & Hohen LLP, No. B256927 (D2d7 May 2, 2016)

After they prevailed in the liability phase of a bifurcated trial, Plaintiffs’ attorneys in a qui tam case issued a press release trumpeting their victory. The losing Defendant, a pipe company, sued Attorneys for defamation and trade libel. It alleged that Attorneys mis-described the issues decided by the jury. According to PipeCo, while the jury might have found that all the pipe it sold to the government might not have met certain certified quality standards, the jury did not find any of the pipe to be actually defective, contrary to what the press release said.

The Attorneys filed an anti-SLAPP motion. PipeCo conceded that the case satisfied the first—“arising from protected activity”—element of the anti-SLAPP analysis. But it claimed to have met its burden on the second element—that it could probably prevail on the merits—because the statements were factual, actually false, and unprivileged. Attorneys, in turn, rested their merits argument on the absolute “fair report” privilege under Civil Code § 47(d), which they claimed barred PipeCo’s claims as a matter of law. The trial court denied the motion, but a split panel of the Court of Appeal reverses.

The case turns on § 47(d)(1), which codifies an absolute privilege against liability for “a fair and true report in, or a communication to, a public journal, of (A) a judicial, (B) legislative, or (C) other public official proceeding, or (D) of anything said in the course thereof.” It includes both reports in public journals, as well as communications to them. The latter was specifically added to the statute in 1997, to bridge the gap between § 47(b)’s privilege applicable to litigants and former § 47(d)’s privilege applicable to reports. Someone who coveys what happened in a litigation to a reporter is the quintessential party protected under § 47(d).

A press release counts as a “communication to” and the release in this case purported to describe occurrences in a litigation. So the rub is whether the press release “fair and true.” The court splits on that issue. The majority notes the standard permits a degree of license and comes down to whether the account would be viewed as substantially true to a reasonable reader. Minor inaccuracies don’t cause the privilege to be forfeited.

The Court ultimately finds that the release accurately described the jury’s findings about the failure to meet the specs. In contrast, an ordinary reader would understand that the release’s statements about the pipes being faulty, substandard, weak, or shoddy did not purport to reflect the verdict, but instead were a fair summary of the trial evidence regarding the pipe. And the other allegedly false statements in the release—mostly statements about the extent of damages exposure—were non-actionable statements of Attorneys’ opinions about the impact and consequence of the verdict and based on a generally accurate summary of the evidence presented. The majority notes that although Attorneys “may be guilty of self-promotion and puffery[, their] description of the evidence at trial and the jury’s special verdict in the . . . press release falls comfortably within the permissible degree of flexibility and literary license afforded communications to the media concerning judicial proceedings.” 

In sum, because the communication was privileged as a matter of law and, consequently, PipeCo couldn’t establish a likelihood of success.

Reversed.

Judge Blumenthal (L.A. Superior, sitting by designation) dissents. His essential issues are: (1) that during the trial, over and over again, the Attorneys’ disclaimed any need to prove the pipe was defective or that they were attempting to do so; (ii) that there were enough disputes in the facts that the Attorneys shouldn’t win on the § 47(d) issue as a matter of law—i.e., that the decision should get to a jury; and (iii) that the majority erred by viewing the alleged falsehoods one-by-one in isolation, as opposed to as a part of a totality analysis.In the context of an anti-SLAPP motion, these kinds of fact disputes should be enough of a showing to merit denial of the motion.

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