Tuesday, March 21, 2017

Our Yemen of Libel Tourism ...

Argentieri v. Zuckerberg, No. A147932 (D1d5 Feb. 15, 2017)

If you want to sue someone for defamation and you have a choice of forum between California and pretty much anywhere else, California is almost always a bad move
, even taking the weather into account. Often the worst. Some of us like it that way.

Paul Ceglia is a sketchy character who claimed that Mark Zuckerberg gave him most of Facebook in a work for hire deal worth $1,000. He sued. But his lawsuit was ultimately dismissed as a fraud on the court when the contract was found to be phony. Ceglia got pinched for fraud and then went on the lam. Hasn’t been seen since 2015.

Zuckerberg struck back. He sued the Ceglia’s attorneys for malicious prosecution. In connection with that filing, Facebook’s GC sent out a press release claiming that the attorneys knew the case wa
s based on forged documents, yet persisted anyway and deserved to held to account. Ultimately, a NY appellate court dismissed the action, finding that there was sufficient evidence that the attorneys did enough of an investigation to have probable cause to bring their claim, even if ultimately specious.

Ceglia’s Attorney then counterattacked by suing Facebook, Zuckerberg, and the GC for defamation
over the press release. While prior litigation was in NY, Attorney sued in San Francisco Superior. Bad idea. Defendants responded with an anti-SLAPP motion. The trial court granted it, finding that Attorney couldn’t show a probability of prevailing because of the litigation privilege as well as the fair reporting privilege, although the latter wasn’t raised in the motion papers.

The Court of Appeal finds that the litigation privilege doesn’t apply. According to the court, the litigation privilege in Civil Code § 47(b) applies only to statements made to a group with a substantial interest in the litigation. General statements broadcast to the press don’t cut it. Nor did the press statement have a sufficient nexus to the objects of the litigation to fall within § 47(b).

Civil Code § 47(d)’s fair reporting privilege, however, did apply. It affords an absolute privilege to “fair and true” reports of what happens in a judicial proceeding. The report doesn’t need to be literal to be fair and true; it just needs to convey the general gist of the litigation event.

Attorney argues that the privilege wasn’t raised in the motion papers. But he doesn’t identify any other facts he would have presented to avoid the privilege, only specific legal arguments. Since those legal arguments can and have been raised in the appeal,
Attorney has had sufficient opportunity to make them, so the court can reach the issue.

On the merits, the press release was an accurate enough description of the complaint, even did not convey the allegations with 100 percent accuracy. The “gist” was there. So the report was “fair and true.” 

And the complaint didn’t fall withing the exception in § 47(d)(2)(A), which says that the privilege doesn’t apply to a statement that violates Rule 5-120 Rules of Professional Conduct. That Rule proscribes an attorney (including an in-house attorney) from making public statements that have a substantial likelihood of prejudicing a litigation. But the Rule itself makes clear that accurate descriptions of the claims or defenses or the public record don’t themselves violate the rule. So the exception didn’t apply.


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