Anti-SLAPP Movant Fails To Establish Prima Facie Case

In September, I wrote about the anti-SLAPP special motion to dismiss filed by The Saudi American Public Relation Affairs Committee and Salman Al-Ansari (its founder/president) in response to a suit by The Institute for Gulf Affairs and Ali Al-Ahmed (its founder).

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Superior Court Holds That Suit Over Comments to WMAU Reporter Is a SLAPP

According to a complaint filed in DC federal court last year, Sean Smith and Erin Wrona contracted with Federal Title & Escrow Company in May 2017 to perform closing services in connection with their house purchase. They alleged that Federal Title then sent them an email to wire $200,000 in earnest money to a designated account, and that they followed those instructions. They allegedly then received a second email with instructions to wire the remaining $1.57 million, and they followed those instructions. When they appeared for the closing, however, Federal Title’s founder (Todd Ewing) told them Federal Title had never received the $1.57 million and, instead, its email had been hacked and the $1.57 million had been diverted.

In their federal court complaint, Smith and Wrona alleged Federal Title, Ewing and others “created a scheme to defraud Plaintiffs for the purpose of obtaining money through fraudulent escrow accounts” and “acted in concert to commit an unlawful act – namely, the theft of Plaintiffs’ funds.”

In August 2017, a WAMU reporter quoted Smith and Wrona’s attorney (Michael Nadel of McDermott Will & Emery) as saying:

  • “Federal Title either caused our money to be stolen or stole it, and we need to get our money back.”
  • “We don’t have any evidence that it happened because of hackers other than Federal Title’s say-so.”
  • “Federal Title never called Sean Smith and said, ‘Bring your money to closing,’ and didn’t even bring it up until the middle of closing. So if they weren’t responsible for helping steal the money, it certainly seems like they knew well in advance of that closing that the money was gone. Their conduct shows that.”

Earlier this year, Federal Title and Ewing sued Smith, Wrona, Nadel, and McDermott Will & Emery for defamation, false light, and tortious interference with business relations. Plaintiffs alleged that Nadel’s statements were “categorically false” and caused the plaintiffs to suffer “actual financial losses and reputational harm.”

Smith and Wrona filed an anti-SLAPP special motion to dismiss. They argued the “subject matter of Smith’s and Wrona’s underlying lawsuit against Federal Title and Ewing (among others) concerns matters of great interest to the public that are discussed in the public forum daily: fraud, deception, cybersecurity, and malicious computer hacking,” thus establishing their prima facie burden. Smith and Wrona argued the plaintiffs could not show they were likely to prevail on the merits.

Nadel and McDermott filed a separate motion to dismiss which also argued the plaintiffs’ claims were fatally flawed. Nadel and McDermott argued that, in addition to dismissal under Rule 12(b)(6), the suit should be dismissed under the DC anti-SLAPP act. According to Nadel and McDermott, “the public interest in the subject about which Mr. Nadel spoke is virtually self-evident, as the underlying lawsuit related to title services in the District marketplace and the increasingly pervasive threat of cybercrime.” They argued the public interest in the suit was also demonstrated by the fact a WAMU reporter contacted Nadel for comment, and that the Federal Title/Ewing complaint pleaded the alleged hacking “‘incident should serve as a reminder to the public about the importance of cybercrime and awareness.’”

Plaintiffs’ opposition to the Smith and Wrona anti-SLAPP special motion to dismiss first argued this was not a SLAPP because it “does not relate to any political or public policy debate, nor are the parties on opposing sides of any political or public policy matter. It does not aim to chill or silence political speech, or any speech at all.” The plaintiffs also argued Smith/Wrona’s interpretation of the “public interest” definition was impermissibly broad and would make virtually any lawsuit a matter of public interest. Plaintiffs argued that, in any event, they were likely to prevail on the merits of their claims, or could make this showing if they were allowed discovery.

The plaintiffs made a similar argument in opposition to the Nadel/McDermott anti-SLAPP special motion to dismiss:

The underlying lawsuit is a private commercial dispute that does not relate to any political issue or public policy debate, and is therefore excluded from the Act. And even if the underlying lawsuit itself were an issue of public interest because it involves cybercrime, Nadel’s statements are still excluded because they are, on their face, expressly directed toward protecting his and his clients’ commercial interests. That Federal Title may have used the article as an opportunity to share information with the public does not transform Nadel’s statement that “Federal Title either caused our money to be stolen or stole it, and we need to get our money back” into a public service announcement.

The Smith and Wrona reply brief noted the statute defined “act in furtherance of the right of advocacy on issues of public interest” to include a written or oral statement made “in connection with an issue under consideration or review by a . . .  judicial body,” and that, at the time the challenged statements were made, their underlying suit was pending in DC federal court. They also argued the challenged statements were not subject to the private interest exception in the public interest definition:

The statute’s exclusion is tailored to carve out “statements directed primarily toward protecting the speaker’s commercial interests rather than toward commenting on or sharing information about a matter of public significance.” D.C. Code §16-5501(3) (emphasis added). The allegedly defamatory comments here fall within “commenting or sharing information about a matter of public significance” in that they relate directly to the underlying case and claims that Smith and Wrona asserted in their complaint before the federal court and are not primarily directed to any commercial interests . . .

Similarly, in response to the plaintiffs’ argument that the Smith/Wrona suit was “a private commercial dispute that does not relate to any political issue or public policy debate, and is therefore excluded from the Act,” Nadel and McDermott’s reply brief cited California decisions interpreting that state’s “commercial speech” exemption, and argued those decisions demonstrated why Nadel’s speech was not subject to the claimed exemption.

Shortly after Nadel/McDermott filed their reply brief, the Superior Court granted the defendants’ 12(b)(6) motions to dismiss and anti-SLAPP special motions to dismiss. The court agreed that, because none of the challenged statements was about Ewing in his personal capacity, the complaint failed to state a claim with respect to Ewing. Turning to Federal Title’s defamation claim, the court agreed with defendants that the challenged statements, in the context of the entire article, were not reasonably capable of conveying a false and defamatory message because they were simply expressing Nadel’s “theory and subjective view of the case.” The court added that the challenged statements were also protected by the fair report privilege. On the false light claim, the court agreed that a corporation “does not have a claim for false light for it does not have a right of privacy that can be invaded.” Finally, the court agreed the complaint failed to plead facts sufficient to sustain a claim for tortious interference.

The court additionally held the suit was subject to dismissal under the DC anti-SLAPP statute:

The action is clearly based on protected speech under the statute as it arises from the privileged statements made by Mr. Nadel to a WAMU reporter after the filing of the underlying federal lawsuit. The issue is included as one of public interest under the broad reading permitted by the statute, which relates to potential concerns regarding cybercrime. According to the article, even Federal Title themselves admit that this “incident should serve as a reminder to the public about the importance of cybercrime awareness and education.” Compl., Ex. A at 3. As a result, the burden shifts onto the Plaintiffs to demonstrate that their claims are likely to succeed on the merits. As discussed above, it is evidence that the claims are unable to succeed on the merits, therefore, the Anti-SLAPP statute dictates the dismissal of the Plaintiff’s Complaint.

My two cents: in their opening and reply briefs, Smith/Wrona and Nadel/McDermott noted the challenged statements were about the Smith/Wrona federal court suit that was pending at the time the statements were made. As such, they argued they satisfied their prima facie burden by showing the statements were made “[i]n connection with an issue under consideration or review by a . . . judicial body.” They additionally argued the challenged statements were in a public forum in connection with an issue of public interest.

The Federal Title/Ewing opposition brief strenuously argued the statements were not in connection with an issue of “public interest” because the Smith/Wrona suit was filed to recover their $1.6 million, and was thus designed to “protect their commercial interests.” Federal Title/Ewing thus argued the suit was subject to the “private interests” exception in the “public interest” definition.

But, as I’ve previously discussed, if the suit arises from statements made “[i]n connection with an issue under consideration or review by a . . . judicial body,” that should satisfy the definition of “an act in furtherance of the right of advocacy on issues of public interest” without getting into the “public interest” definition (and its “private interest” exemption). Although I agree with the Superior Court’s conclusion that Nadel’s statements were made in connection with an issue of public interest (and that the statements were not about private interests), I was hoping the Superior Court might instead address this aspect of the defendants’ arguments. While it did not, that issue is already teed up in the suit against Coca Cola. As always, stay tuned.

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“Everybody’s gonna pay”

I am not a wrestling fan. So I don’t know if it’s true that Ted DiBiase, who wrestled as “The Million Dollar Man,” “is regarded by many as the greatest villain in pro wrestling history.” What I do know is that DiBiase’s theme song included the line “everybody’s gonna pay.” For parties that have recently found themselves on the losing end of anti-SLAPP special motions to dismiss under the D.C. anti-SLAPP statute, they have discovered exactly how much they’re “gonna pay”

First, some background. The D.C. anti-SLAPP statute’s legislative history explained that “defendants of a SLAPP must dedicate a substantial[] amount of money, time, and legal resources.” As such, the statute included a fee-shifting provision that allows a successful movant to recover its fees. The D.C. Court of Appeals has interpreted this provision to mean a successful movant is “presumptively” entitled to recover its fees “unless special circumstances in the case make a fee award unjust.”

So, how much does it cost to prevail on an anti-SLAPP special motion to dismiss under the D.C. statute? Judging from some recent filings – approximately $125,000.

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Another trade association filed an anti-SLAPP special motion to dismiss

In a prior post, I discussed the suit brought by three plaintiffs against Coca-Cola and the American Beverage Association, alleging that certain statements the defendants made about sugar-sweetened beverages and their effects on obesity were false and misleading under the D.C. Consumer Protection Act.

Like Coca-Cola, the ABA filed an anti-SLAPP special motion to dismiss. The ABA’s motion argued it satisfied its prima facie case of showing the suit arose from “an act in furtherance of the right of advocacy on issues of public interest” because its speech occurred in places open to the public/a public forum (website, press releases and billboards), about an issue of public interest (health, community well-being, goods in the marketplace).

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Can An Anti-SLAPP Movant Deny Making the Challenged Statement?

According to a complaint filed in DC Superior Court, earlier this year the Institute for Gulf Affairs published an article titled “Is SAPRAC A Wolf In Sheep’s Clothing?” The article asserted The Saudi American Public Relation Affairs Committee “has a ‘questionable stance on tolerance, especially against Jews and are associated with virulent anti-Semitism.’”

The complaint alleges that SAPRAC’s founder and president, Salman Al-Ansari, was so offended by this article that, in a June interview with a blogger, he made false and defamatory statements about IGA and its founder and director Ali Al-Ahmed, including that:

  • “AlAhmed is a terrorist himself”
  • “AlAhmed ‘cares nothing for the sincere shared collective of ideas and cultures, but AlAhmed will use any means to exterminate the prospects of a peaceful world”
  • “AlAhmed and his cronies at [IGA] are dangerous – they have much more going on here than simple written words – they are subversive and will use any destructive means possible to promote their own misguided agenda of their own brand of terrorism”
  • “this is a perfect example of a Wolf in Sheep’s clothing – AlAhmed might dress in public like a docile Sheep, but, in truth, he is a Wolf – he will destroy anything in his path, even if he has to kill it to get there.”

In their complaint, Al-Ahmed and IGA assert claims for defamation per se, false light invasion of privacy, and intentional infliction of emotional distress.

Last week, SAPRAC and Al-Ansari responded to the suit by filing an anti-SLAPP special motion to dismiss. In it, they argue the suit arises from “an act in furtherance of the right of advocacy on issues of public interest” because the challenged statements were made in an article posted on the Internet (thus satisfying the place open to the public/public forum requirement) about an issue of public interest (“safety” and “community well-being”). They also argue that, because Al-Ahmed is at least a limited purpose public figure, the challenged statements were about a “public figure,” which satisfies the “issues of public interest” definition.

SAPRAC and Al-Ansari argue the plaintiffs cannot show they are likely to succeed on the merits of their defamation or false light claims because the challenged statements were opinions, rhetorical hyperbole, or not defamatory, and because plaintiffs cannot demonstrate the challenged statements were made with actual malice or show special harm. SAPRAC and Al-Ansari additionally argue that, because the defamation claim fails as a matter of law, so must the intentional infliction of emotional distress claim. And, they argue, plaintiffs cannot show their conduct was extreme and outrageous or that it caused severe emotional distress.

My Two Cents: the most interesting part of the SAPRAC and Al-Ansari anti-SLAPP special motion to dismiss brief is buried in the middle, when they assert Al-Ansari never made the challenged statements: “Al-Ansari has never communicated in any way with someone by the name of Spencer Tripens and did not make any of the statements Al-Ansari is alleged to have made that form the basis for the claims in this SLAPP.” In fact, SAPRAC and Al-Ansari argue that plaintiffs cannot satisfy the “publication” element of a defamation claim because they cannot show Al-Ansari made the challenged statements:

In order to present a legally sufficient amount of evidence to demonstrate Defendants published the alleged statements, Plaintiffs must provide evidence on the necessary prerequisite that Al-Ansari, acting in his capacity as director of SAPRAC, published the alleged statements to Tripens. Since Al-Ansari has never communicated in any way with someone by the name of Spencer Tripens and because Al-Ansari did not make any of the statements that he is alleged to have made that form the basis for the claims in this SLAPP, Plaintiffs will not be able to demonstrate a legally sufficient amount of evidence that Defendants published the alleged statements.

As readers know, the plaintiffs opposing the anti-SLAPP special motion to dismiss filed by Fusion GPS and Glenn Simpson argued that Fusion and Simpson needed to make “an affirmative claim that their statements were made in a public forum or involved communicating to the public” to carry their prima facie burden under the D.C. anti-SLAPP statute, and could not simply rely upon the allegations in the complaint. I found a California decision that seemingly accepted this argument and held that, because the defendant there affirmatively denied making the challenged statements, she had not carried her prima facie burden.

In my prior blog post, I noted a Kansas trial court had reached a similar conclusion, holding that, because the plaintiff there submitted an affidavit in which she denied making the challenged statements, she had not carried her burden to establish a prima facie case. I noted that decision was reversed on appeal, with the appellate court holding the relevant question was whether the “claims in the plaintiff’s petition implicate a protected right under the statute” so that it was “irrelevant whether the defendant admits or denies making the statements in question.” (emphasis added).

Last year, the Texas Supreme Court reached a similar conclusion under that state’s anti-SLAPP statute. Several intermediate appellate courts had previously reasoned that, because the purpose of the statute was to protect free speech, protecting a party who denied having exercised free speech was inconsistent with the act’s purpose. The Texas Supreme Court overruled these decisions and held that, “[w]hen it is clear from the plaintiff’s pleadings that the action is covered by the Act, the defendant need show no more.” The court reasoned that “[t]he basis of a legal action is not determined by the defendant’s admissions or denials but by the plaintiff’s allegations.” As such, the court held, “the trial court was obliged to consider the [plaintiffs’] pleadings irrespective of whether [the defendant] formally offered them as evidence.” Because the complaint in the Texas suit alleged the defendant engaged in speech covered by the statute, the court held the anti-SLAPP statute applied, even though the defendant had denied making the statements at issue.

It remains to be seen if the plaintiffs will make this argument in opposition to the anti-SLAPP special motion to dismiss filed by SAPRAC and Al-Ansari and, if they do, how the Superior Court will rule. As always, stay tuned.

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What Is an “Issue of Public Interest”?

If a party moving under the D.C. anti-SLAPP statute shows the suit arises from a statement made in connection with “an issue under consideration or review by a legislative, executive, or judicial body,” does the statement also need to satisfy the “issue of public interest” definition in the statute?  That question is central to a suit pending in DC Superior Court.

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Superior Court Opinion Shows Why We Need a Federal anti-SLAPP Statute

In December 2017, three “international businessmen” sued Fusion GPS and Glenn Simpson, who allegedly retained Christopher Steele to research any Russian connections to Donald Trump, in DC federal court. The suit alleged that certain statements contained in one of the reports prepared by Steele were false and defamatory. Although Fusion and GPS filed an anti-SLAPP special motion to dismiss, it is unlikely the federal district court will even entertain that motion; rather, I anticipate Judge Leon will join his three colleagues (here, here and here) who have held the statute cannot be applied in federal court.

Meanwhile, in April 2018, the same three plaintiffs sued Christopher Steele and Orbis Business Intelligence in DC Superior Court. In Superior Court, unlike federal court, the DC anti-SLAPP statute is available. So Steele and Orbis filed an anti-SLAPP special motion to dismiss, which the Superior Court has now granted, ending the case with prejudice.

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Anti-SLAPP Statute Can’t Be Used Against Subpoena

Two years ago, I blogged about the anti-SLAPP special motion to dismiss filed by the Competitive Enterprise Institute in response to a non-party subpoena served by the Virgin Islands Attorney General. CEI maintained the subpoena, which sought documents relating to climate change and ExxonMobil, was aimed at silencing debate on a matter of public interest. So it filed an anti-SLAPP special motion to dismiss the subpoena.

The DC anti-SLAPP statute requires a party to first show the “claim” arises from an act in furtherance of the right of advocacy on issues of public interest. The statute defines “claim” as “any civil lawsuit, claim, complaint, cause of action, cross-claim, counterclaim, or other civil judicial pleading or filing requesting relief.” CEI argued the subpoena fell comfortably within this definition.

In my June 2016 blog post, I noted another Superior Court judge had already rejected the argument a subpoena was within the definition of “claim” for purposes of an anti-SLAPP special motion to dismiss. The VanderSloot court held that, if the DC Council wanted to include “subpoena” within the definition of “claim,” it knew how to do so (as evidenced by the fact it created a separate section of the statute dealing with subpoenas). The VanderSloot court also held a subpoena was different from the other categories of pleadings delineated in the statutory definition of “claim.”

In an opinion issued last Friday, the Virgin Islands court reached the same conclusion. Like the VanderSloot court, the Virgin Islands court concluded that, by addressing subpoenas in DC Code §16-5503 (the special motion to quash section), without including subpoenas in the definition of “claim,” the DC Council must not have intended “claim” to include subpoenas. Like the VanderSloot court, the Virgin Islands court held the first five examples of “claim” in the statutory definition (“any civil lawsuit, complaint, cause of action, cross-claim or counter-claim”) all differ from a subpoena because they involve a request for relief from the court, and not a request for information from a party or other person.

Next, the Virgin Islands court held the term “other judicial pleading” in the statutory definition of “claim” did not include subpoenas because Superior Court Rule 7(a) limits pleading to “complaints and answers, replies to counterclaims, answers to cross-claims, and third party complaints and answers.” Finally, like the VanderSloot court, the Virgin Islands court held that, because subpoenas are not a “judicial” filing or a “filing requesting relief,” as those terms are commonly used in judicial proceedings, the subpoena did not qualify under the catch-all provision of the “claim” definition. The court thus denied CEI’s motion to dismiss. It also denied CEI’s motion for fees under the anti-SLAPP statute, holding that, because the statute did not apply to the subpoena, CEI was not a prevailing party.

The DC anti-SLAPP statute allows the court to award fees and costs to the non-moving party if the motion “is frivolous or is solely intended to cause unnecessary delay.” The Virgin Islands Attorney General argued that standard was satisfied here because it had already agreed to withdraw the subpoena before CEI filed its anti-SLAPP special motion to dismiss. The court accepted CEI’s argument that the threat of future litigation (if the Virgin Islands re-served the subpoena) did not render the motion moot/frivolous, so it denied the Virgin Islands’ request for fees.

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It’s déjà vu all over again

Three “international businessmen” claim they were defamed by certain statements contained in one of the reports comprising the “Trump Dossier.” The one-count defamation complaint against persons involved in the dossier’s creation alleges one (out of 17) reports in the dossier made false and defamatory statements about the plaintiffs. The defendants respond to the complaint by filing an anti-SLAPP special motion to dismiss.

If this sounds familiar, you are not experiencing déjà vu. The same three plaintiffs sued Fusion GPS and Glenn Simpson, who allegedly retained Christopher Steele to research any Russian connections to Donald Trump, in DC federal court last year. In that suit, which remains pending before Judge Leon, Fusion and Simpson have filed an anti-SLAPP special motion to dismiss (see prior blog entries on the federal court suit here and here).

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Superior Court Grants Anti-SLAPP Motion And Dismisses Tortious Interference Claims Against PBS

The D.C. anti-SLAPP statute has most often been used in cases involving claims of defamation. See Boley v. Atlantic Monthly Group; Moore v. Costa. It has also been successfully invoked in cases involving defamation-related claims. See, e.g., Farah v. Esquire Magazine, Inc. (false light invasion of privacy, Lanham Act, misappropriation invasion of privacy); Forras v. Rauf (false light, assault, intentional infliction of emotional distress). We can now add intentional interference with existing contracts and tortious interference with business expectancies to the list of claims against which a successful anti-SLAPP special motion to dismiss has been made.

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