Insulating Fraud in Film Finance

Ojjeh v. Brown, No. A154889 (D1d3 Dec. 31, 2019)

Sigh.

Defendants raised money from plaintiff for the production of a documentary on Syrian refugees. But they never made any progress on making the film. Instead, they allegedly used the money for other reasons. Plaintiff sued them for breach of contract and fraud.

Defendants filed an anti-SLAPP motion, which the trial court denied because the claims did not arise from protected activity. The Court of Appeal, however, reverses, finding that the conduct from which the claims arise—securing alleged financing for a film—falls within the “conduct in furtherance” catchall under Code of Civil Procedure § 425.16(e)(4).

The court seems to recognize that there are three questions here. First, what conduct does the claim “arise from?” Second, is that conduct “in furtherance” of First Amendment activity. And third, does it relate to an issue of public concern? 

Things seem to go hinky on the second element. As the Supreme Court recently explained in Wilson, the (e)(4) “in furtherance” test can’t just ask if, superficially, the conduct at issue is something that “helps” a media defendant produce content. Otherwise, virtually any claim against a media defendant has to navigate an anti-SLAPP motion to proceed. Thus, courts examining (e)(4) arguments based on “in furtherance” conduct need to look at whether the conduct at issue actually plays a substantial role in carrying out or protecting core First Amendment protected activity.

For instance, the bare fact Wilson concerned CNN’s decision to terminate a news producer was not enough on its own to make that decision “in furtherance of protected activity” under (e)(4), even though employing producers “helps” CNN make the news. Laws of general applicability often incidentally affect the ability of media organizations to create content, but the First Amendment does not create some sort of blanket immunity from those laws.

Instead, (e)(4) was implicated in Wilson only because CNN came forward with evidence that the producer was terminated because he committed plagiarism, which was a sufficient threat to the core journalistic function of the CNN to implicate its exercise of its First Amendment rights, and thus for the termination to be “in furtherance” of those rights. 

The nuance demanded by Wilson is not evident from this opinion. Instead, the court just finds that soliciting investment funding was in furtherance of the production of the documentary—it “helped” the production— and therefore that (e)(4) applies. So apparently you have a protected right to commit fraud, so long as the subject of the fraud is the making of movies. Every huckster fronting as a “movie producer” will be thrilled!

What should have happened here, a la Wilson, is a closer examination of the nexus between the claims and the allegedly First Amendment-implicating activity. A moving defendant bears the burden on this point and in this context, that will usually require it to come forward with evidence extrinsic to the complaint. Which is what happened in Wilson. If the breach of contract and fraud claims are really about creative or political disagreements fundamental to the creation of a documentary, there might well be an (e)(4) issue. But if this was just a straight up promissory fraud ripoff there’s really no reason to be dragging the anti-SLAPP statute into the dispute. 

Reversed.