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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

SLAPP Suits - Internet Library of Law and Court Decisions - Updated May 13, 2008

9 Cal.Rpt.3d 142, A096451 (Cal. App. Crt., 1st App. Dist., October 15, 2003) reversed 40 Cal.4th 33, S 122953 (Cal. Sup. Ct., November 20, 2006)

Rejecting Zeran v. America Online, (4th Cir. 1997) and its progeny, an intermediate California Appellate court holds that the Communications Decency Act ("CDA") does not immunize a user of interactive computer services from a defamation claim arising out of her republication of statements authored by a third party, when the user knew or had reason to know of the falsity of those statements.  As a result, the Appellate Court reversed to much of the decision of the trial court below which had dismissed a defamation claim brought against defendant Ilena Rosenthal as a result of her republication in Usenet postings of a statement authored by a third party (defendant Timothy Bolen) which accused plaintiff Polevoy of criminal conduct.

The trial court had also rested its dismissal under California's Anti-SLAPP statute of plaintiffs' defamation claims on its determination that Polevoy lacked the requisite probability of success because, as a public figure, he could not prove that defendant Rosenthal acted with 'malice' when republishing Bolen's statements.  The Appellate court rejected this determination, holding that plaintiff may be able to establish that Rosenthal acted with the required malice, and therefore could proceed, notwithstanding Rosenthal's allegation that she had checked the veracity of the statements she was republishing with the alleged victim.  The Appellate Court held that such was insufficient to require dismissal of plaintiff's complaint, because of the alleged bias of both the victim and the original author of the posting against the plaintiff.

The Appellate Court did affirm the lower court's dismissal of defamation claims advanced by plaintiff Barrett, because the statements at issue were non-actionable opinion, as well as the trial court's decision to award Rosenthal attorney's fees expended in pursuing her Anti-SLAPP motion to dismiss (though reducing the recoverable amounts to reflect the reversal of that court's decision as to the claims asserted by Polevoy).

This decision, if followed, could have important ramifications for internet service providers and others who regularly repost publications authored by third parties without reviewing their content.  Under the court's ruling, service providers can be liable for defamation as a result of their republication of such statements if they know or have reason to know of the falsity of those statements.  According to the court "distributor liability would [generally] not require a service provider to review communications in advance of posting them but only to act reasonably after being put on notice that the communication is defamatory."  As a result, once the service provider receives notice (from the allegedly defamed individual) of falsity, it must either undertake adequate steps to ascertain the veracity of the statement, remove it, or face potential liability.  This creates tremendous uncertainty as the court did not specify what such adequate steps would be.  Indeed, as noted above, in the case at bar, where plaintiff alleged he was defamed by a statement that he had engaged in criminal conduct, the court held that contacting the victim was not sufficient as a matter of law to warrant dismissal of plaintiff's suit because of the victim's purported bias against plaintiff Polevoy.  Subsequent developments in this case should be watched closely by those interested in this field.

333 F.3d 1018, No. 01-56380 (9th Cir., June 24, 2003) petition rehearing and rehearing en banc, denied, 351 F.3d 904 (9th Cir., December 3, 2003)

In this defamation suit, the Ninth Circuit Court of Appeals holds that the operator of a listserv and website is a user of interactive computer services entitled to the protections of the Communications Decency Act ("CDA") against liability arising out of his publication of information provided by another information provider.  Because, however, the author of the information at issue claimed he did not mean for the defendant operator of the listserv to publish it, the Ninth Circuit remanded the case to the District Court for a determination as to whether the listserv operator was entitled to immunity under the CDA in this particular case.  Such immunity should be granted, held the Ninth Circuit, if the information in question was provided to the listserv operator by a third party under circumstances in which a reasonable person would conclude that the third party provided the information for publication on the Internet.  The Ninth Circuit accordingly vacated so much of the District Court's decision which denied defendant's motion to dismiss this defamation action under California's Anti-SLAPP statute, which motion was to be reconsidered on remand.  The Ninth Circuit also affirmed the District Court's rejection of plaintiff's defamation claims against Mosler, which were predicated solely on its placement of ads on the website at issue.

B160126 (Cal. Crt. App., March 4, 2003)

Court denies defendant's motion, brought under California Code of Civil Procedure Section 425.16, to strike defamation, disparagement and intentional interference claims arising out of statements defendant allegedly made in Internet chat rooms.  Defendant sought to strike these claims on the ground that they were advanced to inhibit his criticism of plaintiff in violation of Section 425.16, which provides protection against "Strategic Lawsuits Against Public Participation," otherwise known as SLAPP suits.  While the Court found that defendant's chat room comment were entitled to protection under Section 425.26, it held that plaintiffs had proffered sufficient evidence in support of the validity of their defamation claims to be permitted to proceed therewith.

2007 WL 1300065 (Cal. Crt. App., 2d Dist., My 4, 2007)

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.

Case No. C 06-2057 JF (RS) (N.D. Ca., March 16, 2007)

Court dismisses action seeking redress as a result of Google’s alleged downward manipulation of the “Page Rank” it assigned plaintiff’s website.  This act allegedly reduced the ranking of plaintiff Kinderstart.com’s search engine in various Google Search results which, in turn, adversely impacted both the traffic and advertising revenue plaintiff Kinderstart.com’s site generated.  “Page Rank” is a system offered by Google for rating the usefulness of websites.  Google’s search engine utilizes the relative “Page Ranks” it assigns to websites in determining the order in which to deliver responsive search results to a user’s query. 

In its Second Amended Complaint, plaintiff claimed such acts constituted violations of the Sherman Antitrust Act, the Lanham Act and California Business and Professions Code Section 17200, as well as plaintiff’s right to free speech under both the Federal and California constitutions.  Plaintiff Kinderstart.com also alleged that it was defamed by Google’s alleged statement that the low “Page Rank” it assigned plaintiff’s site was arrived at objectively, without human manipulation.

The Court found that Kinderstart.com had failed to state a claim, and accordingly dismissed its complaint with prejudice.

Quick Hits

Colt v. Freedom Communications Inc.
109 Cal. App. 4th 1551, 1 Cal. Rptr. 3d 245 (Cal. Crt. App., 2003)

Court holds that the under the First Amendment and California Civil Code Section 47(d), a party is permitted to publish a ‘fair and true report’ of legal proceedings without  exposure to defamation claims.  Such a report, explained the Court, can contain factual errors and still retain the privilege afforded by Cal. Civil Code Section 47(d) provided it captures ‘the substance, the gist, the sting of the libelous charge.’  This privilege applies both the newspaper articles and to articles posted on the internet.  Finding that the reports at issue, while containing some factual errors, captured the substance and gist of the legal proceedings on which they reported, the California Court of Appeals affirmed the decision of the lower court, which granted defendant newspapers motion to strike plaintiffs’ complaint – which charged defendants with libel as a result of the publication of the articles at issue - under California’s anti-SLAPP statute.  In this case, the newspaper article at issue reported on a proceeding commenced by the Securities and Exchange Commission.  Said the Court:

[T]he First Amendment and Civil Code section 47 subdivision (d) permitted defendants to publish a ‘fair and true report’ of the legal proceedings.  The question thus becomes whether the newspaper articles and internet postings qualify as being fair and true.  If so, plaintiffs are unable to show a probability of prevailing and we must affirm the dismissal of the action.  As defendants point out, the ‘fair and true report’ requirement does not limit the privilege to statements which contain no errors.  Our Supreme Court recognized that ‘erroneous statement is inevitable in free debate and … must be protected if the freedoms of expression are to have the ‘breathing space’ that they ‘need … to survive.’  Thus the publication concerning legal proceedings is privileged as long as the substance of the legal proceedings is described accurately.  “Under California law, a newspapers report is ‘fair and true’ if it captures ‘the substance, the gist, the sting of the libelous charge.’  The news article need not track verbatim the underlying proceeding.  Only if the deviation is of such a ‘substantial character’ that it ‘produces a different effect’ on the reader will the privilege be suspended.  New articles, in other words, need only convey the substance of the proceedings on which they report, as measured by their impact on the average reader. 

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ComputerXpress, Inc. v. Lee Jackson, et al.
93 Cal.App.4th 993, 113 Cal.Rptr.2d 625, E027841 (Cal. Court App., 4th District, Nov. 15, 2001).

Court dismisses trade libel and other claims brought by plaintiff ComputerXpress Inc. arising out of defendants’ publication of statements critical of plaintiff, its products, and its management on Internet message boards under California’s SLAPP (“strategic lawsuit against public participation”) statute, Cal. Code of Civil Procedure section 425.16.  This statute obligates a plaintiff that commences a suit arising out of “an act in furtherance of [defendant’s] right of petition or free speech … in connection with a public issue …” to demonstrate a prima facie case before being permitted to proceed with suit.  If the plaintiff fails to meet this burden, his claim will be subject to dismissal on a special motion to strike.  “Acts in furtherance of a person’s right of petition or free speech” under the Statute include “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.”

The Court held that statements published on Internet message boards such as that at issue – Raging Bull – are statements published in a public forum within the meaning of California’s SLAPP statute.  The Court further held that statements concerning a public company and its business, which may affect numerous investors, are statements in connection with an issue of public interest.  As such, held the Court, the defendants were entitled to the protections of the SLAPP statute.

Finding that ComputerXpress failed to present sufficient evidence to establish a prima facie claim, the Court dismissed so much of its complaint that rested on the Internet postings at issue.  The Court rested its determination, in part, on its conclusion that the challenged statements were non-actionable statements of opinion.  “[W]hile the postings certainly could be considered disparaging, their tone and content identified them as statements of opinion and not fact.  …. [T]hey were hyperbolic, informal, and lacked the characteristics of typical fact-based documents.  Moreover, they were replete with explicit statements of opinion such as “IMO (in my opinion) “what I think is fraud” “I firmly believe” “is that fraud?” and “my guess is.”

The Court did allow plaintiff to proceed with fraud and interference with contractual relations claims arising out of independent acts unconnected with the challenged Internet postings at issue.  These claims arose out of disparaging statements made by defendants to a particular customer of ComputerXpress, as well as out of purported misrepresentations defendants made concerning their own business at a time plaintiff was considering its acquisition.  As to these claims, defendants’ motion to strike was denied.

Finally, the Court held that defendants were entitled to recover under California’s SLAPP statute those attorneys fees they had expended in moving to dismiss the claims on which they prevailed, but not those fees expended in moving to dismiss the remainder of the complaint.  Such an award was rendered pursuant to section 425.16(c) which provides that “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.”  Said the Court: “Defendants consequently are entitled to recover attorney fees and costs incurred in moving to strike the claims on which they prevailed, but not fees and costs incurred in moving to strike the remaining claims.”

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The Traditional Cat Association Inc. v. Laura Gilbreath, et al.
118 Cal. App. 4th 392, 13 Cal. Rptr. 3d 353, (Cal. Crt. App., May 6, 2004)

As cogently stated by the Court: "in California, the accrual of causes of action growing out of the publication of defamatory or other tortious statements is governed by the single-publication rule.  Under the rule, one cause of action will arise, and the statute of limitations will commence running, upon the first general publication or broadcast of a tortious statement, notwithstanding how many copies of the publication are distributed or how many people hear or see the broadcast.  Any subsequent republication or rebroadcast gives rise to a new single cause of action.

We find the single-publication rule applies to statements published on Internet web sites.  Because the statements which give rise to plaintiff's cause of action for defamation were posted on a Web site maintained by one of the defendants more than a year before plaintiffs' complaint was filed, the plaintiffs' defamation cause of action is barred by the applicable statute of limitations, Code of Civil Procedure section 340.  Accordingly, the trial court should have granted the defendants' motion to strike the defamation cause of action."

Here, the defendant submitted a declaration that he did not alter the web site on which the statements that gave rise to plaintiffs' defamation claim, which purported to describe a lawsuit between the parties in terms highly critical of plaintiffs, were posted on web, at any time after May 21, 2001.  As the lawsuit was commenced on May 22, 2002, the Court held it time barred by application of the single publication rule, and California's one year statute of limitations on defamation claims. 

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