Designer Skin LLC v. S & L Vitamins, Inc., et al.
GTX Global Corp. v. Left
2007 WL 1300065 (Cal. Crt. App., 2d Dist., My 4, 2007)
California’s Anti-SLAPP Statute Mandates Dismissal Of Plaintiff’s Defamation Claims
Granting defendant’s motion pursuant to California’s anti-SLAPP statute, Cal. Code Civ. Pro. Section 425.16, the court affirms the dismissal of plaintiff GTX Global Corp.’s (“GTX”) complaint, and awards defendant Andrew Left (“Left”) attorneys fees expended both in defending this suit and plaintiff’s appeal from the decision of the court below. SLAPP is an acronym that stands for “Strategic Lawsuits Against Public Participation.” GTX had sued Left, who runs the stocklemon.com website, for publishing statements critical of GTX. GTX charged that these statements were defamatory, and asserted claims of trade libel, interference with prospective economic advantage, and securities fraud against Left arising out of their publication.
The court found that Left’s statements were subject to the protections afforded by the anti-SLAPP statutes, because they addressed matter of public interest. Finding that GTX had failed to submit any evidence that defendant’s challenged statements were false or defamatory, the court accordingly dismissed the suit.
Stocklemon.com Publishes Statements Critical Of GTX
Plaintiff GTX is a publicly traded corporation that provides technology that facilitates multimedia communications.
Left moved to dismiss pursuant to California’s anti-SLAPP statute, Cal. Civ. Code Section 425.16. The trial court granted Left’s motion, and both dismissed plaintiff’s suit and awarded Left the attorney’s fees expended in its defense. On appeal, an intermediate California appellate court affirmed.
Statements At Issue Address Matter Of Public Interest Protected By Anti-SLAPP
To determine whether a movant is entitled to relief under California’s anti-SLAPP statute, the Court engages in a two part inquiry. First, the movant must establish that the claim asserted against him arise “from any act of [the movant] in furtherance of the person’s right of petition or free speech …”. Among other things, both statements “made in a place open to the public or a public forum in connection with an issue of public interest” 425.16(e)(3) and “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, “are acts in furtherance of a person’s right of petition or free speech and accordingly subject to the protections of the Act.
The Court found that Left was engaged in speech connected with an issue of public interest – namely whether the public should invest in GTX stock – and accordingly held he was entitled to the protection of the statute. Said the Court:
The court also held that Left made his statements in a public forum, within the meaning of the anti-SLAPP statute, by posting them on his weblog. Said the Court:
Notably, according to the court, the statute protects speech, whether made in a public forum or in private, so long as it concerns a public issue. Said the court: “Code of Civil Procedure Section 425.16 therefore, governs even private communications, so long as they concern a public issue.”
GTX Failed To Submit Evidence Sufficient To Establish A Prima Facie Case
Once a movant establishes its conduct falls within the protections of the statute, the burden under the anti-SLAPP statute shifts to the plaintiff to “state and substantiate a legally sufficient claim” by presenting evidence sufficient to establish the existence of a prima facie case.
The Appellate Court affirmed the trial court’s determination that GTX failed to meet this burden, which mandated dismissal of its complaint. The Trial Court held that plaintiff had failed to establish that Left had made any of the defamatory statements he was alleged to have made in the complaint. Moreover, on appeal, the appellate court held that:
The Appellate Court accordingly affirmed the dismissal of plaintiff’s complaint, as well as the Trial Court’s award to defendant of the attorney’s fees expended both in defense of the action, and on appeal.