Case Number: BC528579    Hearing Date: July 08, 2014    Dept: 34

SUBJECT: Special Anti-SLAPP Motion to Strike

Moving Party: Defendants Peter B. Gelblum and Mitchell Silberberg & Knupp LLP

Resp. Party: Plaintiff William S. Lund

Defendants’ special motion to strike plaintiff’s complaint is GRANTED.

The Court GRANTS Defendants’ Request for Judicial Notice. (See Evid. Code, § 452(d).) The Court DENIES Defendants’ Supplemental Request for Judicial Notice.

The Court sustains plaintiff’s objections to paragraph 5 of the Heffern declaration (lack of personal knowledge, lack of foundation). The Court sustains plaintiff’s objections to paragraphs 5 and 8 of the Gelblum declaration (hearsay). The remainder of plaintiff’s objections are overruled.

Plaintiff’s Objections to the Declaration of Jacob Heffern:

Objection
1 SUSTAINED
2 OVERRULED
3 OVERRULED

Plaintiff’s Objections to the Declaration of L. Andrew Gifford:

Objection
1 OVERRULED
2 SUSTAINED
3 SUSTAINED

Plaintiff’s Objections to the Declaration of Peter Gelblum

Objection
1 SUSTAINED
2 SUSTAINED

PRELIMINARY COMMENTS:

The Court notes that plaintiff’s memorandum in opposition is written in 11- or 11.5-point font and uses extensive footnotes, which are written in a 9-point font. The Court assumes that the use of a smaller-than-permitted font and footnotes is an attempt to circumvent the 15-page limit for memoranda. (See Cal. Rules of Court, Rule 2.104 and Rule 3.1113(d).) The Court declines to consider these footnotes.

BACKGROUND:

Plaintiff commenced this action on 11/22/13 against defendants for libel. Plaintiff alleges that defendants published on their professional website a statement that they successfully represented the trustees of trusts for heirs of Walt Disney, holding several hundred million dollars in litigation to remove a trustee who made a secret profit from trust transactions. (Compl., ¶ 8.) The publication concerned plaintiff and was so understood by those who read it. (Id., ¶ 9.) Plaintiff alleges that the publication is false because plaintiff resigned as the trustee pursuant to a settlement agreement which specifically stated that the resignation was not based on any wrongdoing or misconduct of plaintiff. (Id., ¶ 10.) Plaintiff alleges defendants acted with malice in publishing the statement. (Id., ¶¶ 14-18.)

ANALYSIS:

In determining whether to grant or deny a defendant’s section 425.16 special motion to strike, the court must engage in a two-step process. (Shekhter v. Financial Indemnity Co. (2001) 89 Cal.App.4th 141, 150.) First, the court must decide whether the defendant has met the threshold burden of showing that the plaintiff’s cause of action arises from the defendant’s constitutional rights of free speech or petition for redress of grievances. (Ibid.) This burden may be met by showing that the act which forms the basis for the plaintiff’s cause of action was an act that falls within one of the four categories of conduct set forth in section 425.16, subdivision (e).

If the defendant meets his or her initial burden, then the burden shifts to the plaintiff to establish a probability that the plaintiff will prevail on the claim; i.e., present facts which would, if proved at trial, support a judgment in the plaintiff’s favor. (Shekhter, supra, at pp. 150-151.) “[A]n action may not be dismissed under this statute if the plaintiff has presented admissible evidence that, if believed by the trier of fact, would support a cause of action against the defendant.” (Taus v. Loftus (2007) 40 Cal.4th 683, 729.) “The plaintiff need only establish that his or her claim has ‘minimal merit’ [citation] to avoid being stricken as a SLAPP.” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291.) The opposing parties’ burden as to an anti-SLAPP motion is like that of a party opposing a motion for summary judgment. (See, e.g., DaimlerChrysler Motors Co. v. Lew Williams, Inc. (2006) 142 Cal.App.4th 344, 352.) The court does not “weigh credibility [nor] compare the weight of the evidence. Rather, [the court] accept[s] as true the evidence favorable to the plaintiff [citation] and evaluate[s] the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.” (Flatley v. Mauro (2006) 39 Cal.4th 299, 326 [internal quotations omitted].) Whether complainants have satisfied their burden is a question of law. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.)

A. First Prong – Defendant’s Alleged Statement Arises from Protected Activity

Plaintiff alleges that defendants defamed him by making the following statement on their professional website: “Successfully represented trustees of trusts for heirs of Walt Disney, holding several hundred million dollars in litigation to remove a trustee who made a secret profit from Trust transactions.” (Compl., ¶ 9.) Defendants must first establish that this statement constitutes protected activity.

In determining whether a defendant seeking to strike a claim under the anti-SLAPP statute has made a prima facie showing that the plaintiff’s action arises from activity protected by statute, the critical consideration is whether the plaintiff’s cause of action itself, and the act which the plaintiff complains of, is based on an act taken by defendant in furtherance of his right of petition or free speech. (See, e.g., Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347, 358; Birkner v. Lam (2007) 156 Cal.App.4th 275, 281.) “The anti-SLAPP statute’s definitional focus is not on the form of the plaintiff’s cause of action but, rather, the defendant’s activity that gives rise to his or her asserted liability-and whether that activity constitutes protected speech or petitioning.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 92 [emphasis in original].) The statute is to be broadly applied and includes four categories of protected conduct:

(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) 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, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.

(Code Civ. Proc., § 425.16(e).)

Defendants first argue that plaintiff’s claims are based on their conduct relating to protected speech activity in connection with an issue under consideration or review by a judicial proceeding or any other official proceeding authorized by law. (Code Civ. Proc., § 425.16(e)(2).) The SLAPP statute applies to statements made to persons that are not parties or potential parties to the litigation, where the statements were made “ ‘in connection with’ pending or anticipated litigation.” (Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1269.)

Defendants cite to Annette F. v. Sharon S. (2004) 119 Cal.App.4th 1146. The parties in Annette F. had been opposing parties in litigation pertaining to their dissolved relationship and adoption of the defendant’s son. (Id. at pp. 1156-1157.) The litigation received widespread media coverage. (Id. at p. 1157.) While the litigation was pending, the defendant wrote a letter to a third party and sent the letter to a publication wherein she accused the plaintiff of being “a convicted perpetrator of domestic violence against me” who “has made repeated false accusations of child abuse and neglect against me.” (Id. at p. 1158.) The plaintiff thereafter filed a libel action and defendant moved to strike under the anti-SLAPP statute. (Ibid.) The appellate court found that the statements were made in connection with an issue under consideration and review by a judicial body. (Id. at pp. 1160-1161.) The court noted that the underlying litigation was still pending when the letter was published and that the allegations of domestic violence and abuse and neglect were directly at issue in the underlying litigation. (Id. at p. 1161.)

The subject statement pertained to a petition filed by the other trustees of plaintiff’s children’s trust in October 2009 to remove plaintiff as a co-trustee. (RJN, Exh. 1.) Several weeks later, plaintiff and his son filed responsive petitions to remove the other trustees. (Gifford Decl., ¶ 7.) On 9/14/10, the parties in the trust litigation reached a settlement agreement which included, among other things, the following terms: plaintiff would resign as co-trustee and his son’s trust would pay him $500,000.00 per year for the rest of his life. (RJN, Exh. 4.) The Court approved the settlement agreement on 11/12/10. (Ibid.)

In December 2010, plaintiff’s son filed a distribution petition seeking to compel the other trustees to make certain distributions and to remove the trustees. (RJN Exh. 2.) The petition alleged that the trustees had not made required distributions to plaintiff’s son because of a petition in Arizona to appoint a guardian and conservator over the son. (See ibid.) The petition refers to the settlement agreement, but appears to allege only that the trustee’s failed to meet certain obligations. (See RJN Exhs. 2-3.) Defendants do not provide evidence showing that the settlement agreement pertains to the current litigation, other than a conclusory declaration from L. Andrew Gifford (a trustee and defendant in a related action) that plaintiff’s conduct regarding the trust is at issue in the distribution litigation because, in deciding to delay the distributions, he and other trustees considered plaintiff’s son’s reliance on and trust of plaintiff even after he had seen evidence of plaintiff’s misconduct. (Gifford Decl., ¶ 12.)

Defendants do not sufficiently establish that the statements were in connection with a pending or anticipated litigation. There is no showing that the statements were published before the Court entered the settlement in the trust action. The statement does not reference the distributions or other matters alleged in the pending distribution litigation. Defendants’ argument that the substance of the statement is at issue in the distribution litigation is not well taken. Defendants do not provide sufficient evidence showing that the substance of the statement could be at issue. Defendants’ statement is merely that plaintiff was removed as trustee for alleged misconduct. There appears to be no dispute that plaintiff resigned from the trust as a result of the settlement agreement. The conclusory declaration of one of the trustees is not enough to meet defendants’ burden.

Defendants next argue that plaintiff’s claims are based on conduct relating to their protected speech activity in the exercise of their rights to free speech in a public forum and in connection with an issue of public interest. (Code Civ. Proc., § 425.16(e)(3).) The statement was in a public forum because it was posted on the internet. (See Compl., ¶ 9; Kronemyer v. Internet Movie Data Base, Inc. (2007) 150 Cal.App.4th 941, 950.) The primary dispute as to this argument is whether the statements were connected with an issue of public interest.

Section 425.16 does not define “an issue of public interest.” Nevertheless, the statute requires the issue to include attributes that make it one of public, rather than merely private, interest. [Citation.] A few guiding principles can be gleaned from decisional authorities. For example, “public interest” is not mere curiosity. Further, the matter should be something of concern to a substantial number of people. Accordingly, a matter of concern to the speaker and a relatively small, specific audience is not a matter of public interest. Additionally, there should be a degree of closeness between the challenged statements and the asserted public interest. The assertion of a broad and amorphous public interest is not sufficient. Moreover, the focus of the speaker’s conduct should be the public interest, not a private controversy. Finally, a defendant charged with defamation cannot, through his or her own conduct, create a defense by making the claimant a public figure. Otherwise private information is not turned into a matter of public interest simply by its communication to a large number of people. [Citation.]

Being based on case law, the precise boundaries of a public issue have not been defined. Nevertheless, in each case where it was determined that a public issue existed, “the subject statements either concerned a person or entity in the public eye [citations], conduct that could directly affect a large number of people beyond the direct participants [citations] or a topic of widespread, public interest [citation].” [Citation.]

(Hailstone v. Martinez (2008) 169 Cal.App.4th 728, 736-737.)

In his complaint, plaintiff describes himself as a “well respected … entrepreneur with a legacy of professional accomplishments” who “has enjoyed a stellar reputation in business for his philanthropic service.” (Compl., ¶¶ 6-7.) Plaintiff states that he was the president and chairman of the Board of California Institute of the Arts, CEO of Newport Development Company, and served as a director or officer of several other prominent corporations. (Id., ¶ 7.) Plaintiff’s real estate transactions have received media attention. (See Gelblum Decl., ¶ 14, Exh. 10.) In 2010, the Arizona Republic published a lengthy article which discussed the allegations that plaintiff had improperly profited from trust transactions. (Id., ¶ 8, Exh. 6.) There have been other public articles about the disputes between plaintiff’s family and the trust. (See id., ¶¶ 8-10, Exhs. 6-8.) This evidence is sufficient to show that the statements were related to a matter of concern to a substantial number of people. Therefore, the Court finds that the statement is protected speech under section 425.16(e)(3).

Plaintiff argues that the statement cannot be protected speech because it is commercial speech exempted from the anti-SLAPP statute’s protections.

Section 425.16 does not apply to any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services, including, but not limited to, insurance, securities, or financial instruments, arising from any statement or conduct by that person if both of the following conditions exist:

(1) The statement or conduct consists of representations of fact about that person’s or a business competitor’s business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person’s goods or services, or the statement or conduct was made in the course of delivering the person’s goods or services.

(2) The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer, or the statement or conduct arose out of or within the context of a regulatory approval process, proceeding, or investigation, except where the statement or conduct was made by a telephone corporation in the course of a proceeding before the California Public Utilities Commission and is the subject of a lawsuit brought by a competitor, notwithstanding that the conduct or statement concerns an important public issue.

(Code Civ. Proc., § 425.17(c).)

Section 425.17(c) has been interpreted

to exempt from the anti-SLAPP law a cause of action arising from commercial speech when (1) the cause of action is against a person primarily engaged in the business of selling or leasing goods or services; (2) the cause of action arises from a statement or conduct by that person consisting of representations of fact about that person’s or a business competitor’s business operations, goods, or services; (3) the statement or conduct was made either for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person’s goods or services or in the course of delivering the person’s goods or services; and (4) the intended audience for the statement or conduct meets the definition set forth in section 425.17(c)(2).

(Simpson Strong-Tie Company, Inc. v. Gore (2010) 49 Cal.4th 12, 30.)

Defendants concede that criteria 1, 3 and 4 above apply (see Reply, p. 1:28) and the Court agrees. Defendants are engaged in the business of selling legal services. (See Troncali Decl., ¶¶ 4-7, Exhs. A-D.) Because the statement emphasizes defendants’ success in a prior legal matter, the purpose of the statement is to promote defendants’ services to current or potential customers. (See State Bar Formal Ethics Opinion 2001-155 [stating that an attorney’s website may be a “communication”, which includes within its definition every advertisement].) Because the statement was posted to defendants’ professional website, the intended audience is likely actual or potential clients.

The question for the court is whether factor #2 applies; does “the cause of action arise from a statement or conduct by that person consisting of representations of fact about that person’s or a business competitor’s business operations, goods, or services”? Under the analysis of our Supreme Court in Simpson Strong-Tie Company, Inc. v. Gore, the answer is “no.”

“The burden of proof as to the applicability of the commercial speech exemption, therefore, falls on the party seeking the benefit of it—i.e., the plaintiff.” (Simpson Strong-Tie Company, Inc. v. Gore (2010) 49 Cal.4th 12, 26.)

In Simpson, the gravamen of the complaint was defamation because the complaint “falsely communicates to the reader that Simpson’s products are defective”. (Id. at p. 30.) However, our Supreme Court found this was not sufficient to invoke the commercial speech exemption.
“We will assume arguendo that the advertisement implies that Simpson’s galvanized screws are defective. As the Court of Appeal recognized, however, even an implication that Simpson’s screws are defective “is not ‘about’ [defendant] Gore’s or a competitor’s ‘business operations, goods, or services….’ (§ 425.17(c)(1).) It is, rather, a statement ‘about’ Simpson—or, more precisely, Simpson’s products.” It therefore falls squarely outside section 425.17(c)’ s exemption for commercial speech.” (Id.)

So too here. Defendants’ defamatory statement – that Lund was removed as trustee because he made a secret profit from trust – is not about defendants’ or a competitor’s business. Rather, it is about Lund. As Simpson holds, “[i]t therefore falls squarely outside section 425.17(c)’ s exemption for commercial speech.” (Id.)

Defendants have met their burden of establishing that plaintiff’s claims are based on his protected speech under the anti-SLAPP statute. The burden now shifts to plaintiff to establish a probability of prevailing on the merits.

B. Second Prong – Plaintiff Has Not Met His Burden of Showing a Probability of Prevailing on the Merits because the Complaint is Barred by the Applicable Statute of Limitations

Once a defendant has established that the anti-SLAPP statute applies, the burden shifts to the plaintiff to demonstrate a “probability” of success on the merits. (Code Civ. Proc., § 425.16(b); Equilon Enterprises LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) “[A] plaintiff must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” (Matson v. Dvorak (1995) 40 Cal.App.4th 539, 548.)

The evidentiary showing by the plaintiff must be made by competent and admissible evidence. (Morrow v. Los Angeles Unified School District (2007) 149 Cal.App.4th 1424, 1444; see also Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1497-98 [proof cannot be made by declaration based on information and belief]; Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1236-38 [documents submitted without proper foundation could not be considered in determining plaintiff’s probability of prevailing on its claim].) The trial court properly considers the evidentiary submissions of both the plaintiff and the defendant, but it may not weigh the credibility or comparative strength of the evidence and must instead simply determine whether the plaintiff’s evidence would, if believed by the trier of fact, be sufficient to result in a judgment for plaintiff. (McGarry v. University of San Diego (2007) 154 Cal.App.4th 97, 108-09.) Further, “[w]hether or not the evidence is in conflict, if the plaintiff has presented a sufficient pleading and has presented evidence showing that a prima facie case will be established at trial, the plaintiff is entitled to proceed.” (Moore v. Shaw (2004) 116 Cal.App.4th 182, 193.)

“The tort of defamation ‘involves (a) a publication that is (b) false, (c) defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure or that causes special damage.’ [Citation.]” (Taus v. Loftus (2007) 40 Cal.4th 683, 720.) “[F]alse statements charging the commission of crime or tending directly to injure a plaintiff in respect to his or her profession by imputing dishonesty or questionable professional conduct are defamatory per se.” (Burrill v. Nair (2013) 217 Cal.App.4th 357, 383.) “If the person defamed is a public figure, he cannot recover unless he proves, by clear and convincing evidence [citation], that the libelous statement was made with ‘ “actual malice” — that is, with knowledge that it was false or with reckless disregard of whether it was false or not.’ [Citation.]” (Reader’s Digest Assn. v. Superior Court (1984) 37 Cal.3d 244, 256.)

Defendant argues that plaintiff’s claims fail because they are barred by the applicable statute of limitations. An action for slander is governed by a one-year statute of limitations. (See Code Civ. Proc., § 340(c).) The original defamatory statement was posted to defendant’s website on or before October 26, 2012. Thus, unless it was republished, plaintiff’s complaint, which was filed on November 23, 2013, would be barred by the statute of limitations.

Gelblum’s biography, which contained the defamatory statement, was updated in 2014; the update included two relatively minor changes: 1) defendant changed the copyright date and 2) indicated that Gelblum had been named a Super Lawyer and Best Lawyer in 2014. (Troncali Declaration, Exhs. B and C.) Neither change concerned the defamatory statements at issue here.

Defendants correctly argue that these changes do not trigger the republication rule.

In Yeager v. Bowlin, 693 F.3d 1076 (9th Cir. 2012), the 9th Circuit held that a similar revision on a website containing defamatory material was not a republication:

“Yeager filed this lawsuit in January 2008. He alleges that statements on the Aviation Autographs website violate his common law right to privacy and California’s statutory right to publicity, Cal. Civ.Code § 3344. Both claims are subject to a two-year statute of limitations. [Citations] There is no evidence in the record that the Bowlins added any information about Yeager, or changed any of the challenged statements about Yeager on their website, after October 2003.”
.
.
.
“Applying the single-integrated-publication test to nontraditional publications can be tricky. . . .One ‘general rule’ is that a statement is republished when it is ‘repeat[ed] or recirculate[d] … to a new audience.’ Hebrew Acad. of S.F. v. Goldman, 42 Cal.4th 883, 70 Cal.Rptr.3d 178, 173 P.3d 1004, 1007 (2007). And we have previously held that, under California’s single-publication rule, once a defendant publishes a statement on a website, the defendant does not republish the statement by simply continuing to host the website. . . . ”

Yeager argues that the website was republished, and the statute of limitations restarted, each time the Bowlins added to or revised content on their website, even if the new content did not reference or depict Yeager. For example, the reference to Yeager on the “News and Events” page was added in 2003, but that webpage also contains entries on other topics that were apparently added through the fall of 2009. Although one California Court of Appeal has noted in dicta that “[t]he modification to a Web site does not constitute a republication,” Christoff v. Nestle USA, 152 Cal.App.4th 1439, 62 Cal.Rptr.3d 122, 138 (2007), rev’d in part, Christoff, 97 Cal.Rptr.3d 798, 213 P.3d 132, the California appellate courts have not squarely addressed this question. We reject Yeager’s argument and hold that, under California law, a statement on a website is not republished unless the statement itself is substantively altered or added to, or the website is directed to a new audience. . . .”

(Yeager v. Bowlin (9th Cir. 2012) 693 F.3d 1076, 1081-1082 cert. denied, (U.S. 2013) 133 S.Ct. 2026 [185 L.Ed.2d 886] reh’g denied, (U.S. 2013) 134 S.Ct. 33 [186 L.Ed.2d 947].)

Other courts around the country have similarly found that minor changes to a website, such as those in this case, do not amount to a republication. (See, e.g., (Firth v. State of New York (2002) 98 N.Y.2d 365, 371 [“The mere addition of unrelated information to a Web site cannot be equated with the repetition of defamatory matter in a separately published edition of a book or newspaper….”]; Atkinson v. McLaughlin (D.N.D.2006) 462 F.Supp.2d 1038, 1055 [a modification that did not amount to a substantive change to a Web site did not constitute a republication]; Churchill v. State (2005) 378 N.J.Super. 471, 483, 876 A.2d 311 [Updates to a Web site do not constitute a republication where the updates do not alter the substance].)

Plaintiff argues that the updating of Gelblum’s biography constitutes a “new issue or edition” of the website, and hence resets the statute of limitations. (See Opp., p. 11:24-28.) Plaintiff cites to Shively v. Bozanich for the proposition that “notwithstanding the single-publication rule, a new edition or new issue of a newspaper or book still constitutes a new publication, giving rise to a new and separate cause of action and a new accrual date for the purpose of the statute of limitations.” (Shively v. Bozanich (2003) 31 Cal.4th 1230, 1246, fn. 7.) However, this does not help plaintiff. The minor change in Gelblum’s biography is not a “new edition or new issue” of the website.

Allowing these minor changes – changes that did not effect the defamatory statement at issue in this lawsuit – to reset the statute of limitations would reek havoc on the Internet. “Refusing to apply the single-publication rule to the internet would have “ ‘a serious inhibitory effect on the open, pervasive dissemination of information and ideas over the Internet, which is, of course, its greatest beneficial promise.’ (Yeager v. Bowlin, supra, at p. 1083.)

This Court finds that plaintiff’s claims are barred by the statute of limitations.

Defendant’s motion to strike plaintiff’s complaint pursuant to section 425.16 is GRANTED. Defendant may bring a subsequent motion for attorney’s fees and costs incurred in bringing the instant motion. (See Code Civ. Proc., § 425.16(c)(1).)

SUBJECT: Motion to consolidate

Moving Party: Defendants Peter B. Gelblum and Mitchell Silberberg & Knupp LLP

Resp. Party: Plaintiff William S. Lund

Defendants’ motion to consolidate is DENIED as MOOT.