Case Name: Wedgewood, et al. v. Helm, et al.
Case No.: 17-CV-314287

This action initiated by plaintiffs Wedgewood (“Wedgewood”), Eagle Vista Equities, LLC, Duke Partners II, LLC, Green Apple Properties I, LLC, and Green Apple Properties V, LLC against defendants George Helm (“Helm”) and Helm Energy Inc. (“Helm Energy”) (collectively “Defendants”) arises from alleged defamatory statements made by Helm.

According to the allegations of the complaint (“Complaint”), Wedgewood is in the business of purchasing, refurbishing, and reselling residential property. (Complaint, ¶ 13.) Wedgewood hired Defendants as independent contractors to refurbish certain properties. (Id. at ¶ 14.)

Wedgewood advertises its services on the online professional networking service LinkedIn, where it has over 6,500 followers. (Complaint, ¶¶ 17-19.) Helm, acting on behalf of himself and Helm Energy, published two comments on Wedgewood’s LinkedIn page. First, in response to a job applicant’s comment that he had not received a response from Wedgewood, Helm wrote that he had a negative experience as a contractor there because the company tried to short him thousands of dollars. (Id. at ¶ 20a.) Helm stated “they have a track record from what I have seen that reflects a policy that require them to try and pay 10% of what is owed or nothing at all.” (Ibid.) This statement is false because Wedgewood does not owe Defendants money or have a policy to only pay 10% of what it owes vendors. (Id. at ¶ 23.)

In a second LinkedIn post, Helm wrote:

I am sure the founder knows who i am and he has instructed his people to bully and abuse and torcher me in an effort to not pay me what i am owed. I WAS ABUSED BY [EMPLOYEE] TED GILCHRIST AND AFTER I HAD GIVEN HIM THE EVIDENCE THAT SUPPORTS MY CLAIM THAT I AM OWED, INSTEAD OF LOOKING IT UP HE JUST ATTACKED MY PERSONAL LIFE AND BE LITTLED EDUCATION AN MY SERVICE TO THIS COUNTRY….. am a disabled veteran and i work harder then most who are not and i have been owed so long i should have lost my home. i have lost everything….I ONLY WANTED WHAT WAS OWED AND YOU HAVE NOW TAKEN EVERYTHING THERE IS NOTHING LEFT FOR YOU TO TAKE I HAVE BEEN HUMILIATED AND BROKEN BECAUSE WEDGEGEWOOD HAS A CORPORATE CULTURE DEVELOPED FROM THE TOP DOWN TO STEAL WHAT ISNT TIED DOWN.

(Complaint, ¶ 20b.) This statement is false because Wedgewood’s founder did not instruct others to bully, abuse, or torture Helm, Ted Gilchrist did not abuse Helm, and Wedgewood does not have a corporate culture of stealing from its vendors. (Id. at ¶ 23.)

Plaintiffs assert causes of action for libel per se and declaratory relief.

Presently before the Court is Defendants’ special motion to strike the first cause of action for libel per se. Defendants also request an award of attorney’s fees and costs.

I. Merits of the Motion
Code of Civil Procedure section 425.16 (“Section 425.16”) authorizes a party to bring a special motion to strike the entire complaint or a cause of action arising from his or her exercise of the constitutional right to petition for redress of grievances and speak freely in connection with a public issue. (Code Civ. Proc., § 425.16, subds. (b)(1), (e); Coretronic Corp. v. Cozen O’Connor (2011) 192 Cal.App.4th 1381, 1387.) Courts evaluate special motions to strike using a two-step analysis. (Country Side Villas Homeowners Assn. v. Ivie (2011) 193 Cal.App.4th 1110, 1116 (“Ivie”).) The moving party bears the initial burden of showing the challenged causes of action arise from protected activity. (Id. at pp. 1116-17, citing Code Civ. Proc., § 425.16, subd. (e).) If the moving party satisfies this initial burden, the burden shifts to the opposing party to demonstrate a probability of prevailing on those causes of action. (Id. at p. 1117; see also Code Civ. Proc., § 425.16, subd. (b)(1).) A court need not evaluate the opposing party’s probability of prevailing if the moving party fails to demonstrate the causes of action arise from protected activity in the first instance. (Ivie, supra, 193 Cal.App.4th at p. 1117.)

There are four categories of conduct constituting protected activity. (Code Civ. Proc., § 425.16, subd. (e).) Defendants argue Helm’s two statements are protected under Section 425.16, subdivision (e)(3), which provides that “any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest” is protected activity. It is well-established that websites accessible to the public, such as LinkedIn, are public forums for purposes of Section 425.16. (See Wong v. Jing (2010) 189 Cal.App.4th 1354, 1367 (“Wong”); see also Kronemyer v. Internet Movie Data Base, Inc. (2007) 150 Cal.App.4th 941, 950.) Wedgewood does not argue otherwise. The point of contention here is whether this cause of action involves a matter of public interest.

Section 425.16 does not define the term ‘public interest.’ (Cross v. Cooper (2011) 197 Cal.App.4th 357, 372 (“Cross”).) “The definition of ‘public interest’ within the meaning of the anti-SLAPP statute has been broadly construed to include not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity. [M]atters of public interest . . . include activities that involve private persons and entities, especially when a large, powerful organization may impact the lives of many individuals.” (Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 479, internal quotation marks and citations omitted.)
As articulated by the court in Rivero v. American Federation of State, County, and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, 924 (“Rivero”), there are generally three circumstances where a statement will be deemed to involve an issue of public interest: (1) where it relates to a person or entity in the public eye, such as a nationally known figure or participant on a public television show; (2) where it could affect a large number of people beyond the direct participants, such as a statement made in connection with an election to the board of a homeowners association governing over 3,000 individuals; and (3) where it concerns a topic of widespread social interest, such as a news exposé about child molestation on youth sports teams.
Defendants contend Helm’s statements fall within a fourth category, consumer information. Defendants assert Helm’s statements qualify as consumer information because they were “intended to act as a warning to other potential employees of Wedgewood as to Wedgewood’s character and questionable business practices with regard to its employees.” (Mem. Ps. & As., p. 5:28-6:2.)

It is true that “consumer information that goes beyond a particular interaction between the parties and implicates matters of public concern that can affect many people is generally deemed to involve an issue of public interest for purposes of the anti-SLAPP statute.” (Wong, supra, 189 Cal.App.4th at pp. 1366–67; Wilbanks v. Wolk (2004) 121 Cal.App.4th 883, 898 (“Wilbanks”) [“Consumer information, however, at least when it affects a large number of persons, also generally is viewed as information concerning a matter of public interest.”].)
Statements involving consumer information warn consumers not to use a particular service. (See Wilbanks, supra, 121 Cal.App.4th at p. 900.) For example, statements advising the public not to hire certain insurance brokers because they were under government investigation related to an issue of public interest since the information helped consumers choose brokers. (Ibid.) Similarly, a newspaper article cautioning patients against using a certain medical practitioner involved an issue of public interest because the information could help consumers choose a doctor. (Carver v. Bonds (2005) 135 Cal.App.4th 328, 343–344 (“Carver”).)

In contrast, the issue here does not concern consumer information because Helm’s statements were not actually directed to consumers. The first statement was directed to an applicant who had not heard back from Wedgewood and the second statement seems to have been directed to Wedgewood itself as Helm repeatedly stated “you.” In addition, the gravamen of the statements is that Wedgewood did not pay Helm for his services. (See Complaint, ¶ 20a-b.) Clearly, these statements do not relate to services provided to consumers; they concern nonpayment for services rendered to Wedgewood. Moreover, even though Helm states he intended the statements to warn against working for Wedgewood, they do not actually contain any explicit warnings. (See Trindade v. Reach Media Group, LLC (N.D. Cal., July 31, 2013, No. 12-CV-4759-PSG) 2013 WL 3977034, at *12 (“Trindade”) [complaint about nonpayment on website is not tantamount to warning consumers].) As such, the statements are distinguishable from those described above where the issues affected consumers and were consequently of public interest. (See Carver, supra, 135 Cal.App.4th at pp. 343-344; Wilbanks, supra, 121 Cal.App.4th at p. 900.) At most, Helm’s statements describe potentially unlawful workplace activity and a private grievance between an independent contractor and his employer. That activity is not an issue of public interest, even if it implicates a public policy. (Rivero, supra, 105 Cal.App.4th at p. 924.)

Further, even if Helm’s statements concerned consumer information, it is not apparent they might affect enough individuals to qualify as an issue of public interest. As stated above, consumer information can qualify as a matter of public interest if it affects many people. (Wong, supra, 189 Cal.App.4th at pp. 1366–67; Wilbanks, supra, 121 Cal.App.4th at p. 898.) In determining whether the an issue affects many people or the public at large, courts have relied on evidence reflecting the number of individuals in the industry, the amount of revenue generated by a business, the number of shareholders of a publicly traded company, and the number of consumers of a particular product. (Wilbanks, supra, 121 Cal.App.4th at p. 899 [discussing information relied upon when determining whether statements qualify as consumer information].) Defendants do not offer any similar evidence. While Wedgewood alleges it has 6,500 LinkedIn followers, Defendants do not actually provide any evidence substantiating that claim or offer any other evidence relating to how many individuals would be affected by Helm’s statements. Thus, Defendants have not established Helm’s statements involve issues of public interest on the basis they concern consumer information.

Next, as aptly argued by Wedgewood, Helm’s statements do not otherwise fall within one of the three circumstances set forth in Rivero where a statement concerns an issue of public interest. (See Rivero, supra, 105 Cal.App.4th at p. 924 [describing the three categories].) First, the statements do not relate to a person or entity in the public eye, such as a nationally known figure. Next, as stated above, there is no evidence suggesting the statements affect a large number of people beyond the direct participants because Defendants offer no evidence as to the number of people actually affected by these statements. Last, for similar reasons, there is no evidence reflecting the statements concern a widespread social interest.

Even assuming the subject matter either fit within one of these three categories, that alone would be insufficient to constitute an issue of public interest. (See Wilbanks, supra, 121 Cal.App.4th at p. 898.) Where, as here, there is no evidence reflecting the issue is of interest to the public at large, “the constitutionally protected activity must, at a minimum, occur in the context of an ongoing controversy, dispute or discussion, such that it warrants protection by a statute that embodies the public policy of encouraging participation in matters of public significance.” (Du Charme v. International Broth. of Elec. Workers, Local 45 (2003) 110 Cal.App.4th 107, 119, original italics.) Helm does not present any evidence indicating there was an ongoing controversy, dispute or discussion regarding Wedgewood’s practices or employee relations. Rather, Helm posted an unsolicited statement on Wedgewood’s LinkedIn page to complain about nonpayment. An unsolicited complaint of wrongdoing is not activity occurring in the context of an ongoing controversy. (Trindade, supra, 2013 WL 3977034, at *11.) As the statements were not published in the context of an ongoing controversy, dispute, or discussion, they do not qualify as an issue of public interest.

For the foregoing reasons, Defendants failed to establish that Helm’s statements concern an issue of public interest. As such, it is unnecessary to evaluate Wedgewood’s probability of prevailing on the libel per se cause of action. (See Ivie, supra, 193 Cal.App.4th at p. 1117.)

Accordingly, Defendants’ special motion to strike is DENIED.

II. Request for Attorney’s Fees and Costs
Defendants request an award of attorney’s fees and costs pursuant to Section 425.16, subdivision (c)(1), which provides that a prevailing defendant shall be entitled to recover his or her attorney’s fees and costs. As Defendants did not prevail, they are not entitled to an award of attorney’s fees and costs. Accordingly, their request is DENIED.

The Court shall prepare the Order.