Sonoma Media Invs., LLC v. Superior Court of Sonoma Cnty.

Plaintiff William Gallaher is a real estate developer in Santa Rosa. During the 2016 Santa Rosa City Council (sometimes City Council) election, defendant The Press Democrat published a series of five articles about substantial independent election expenditures made by Gallaher's son-in-law, plaintiff Scott Flater, on behalf of three City Council candidates. Plaintiffs allege the articles falsely implied that Gallaher was the source of the funds spent by Flater during the 2016 election. Plaintiffs brought suit against The Press Democrat, Sonoma Media Investments, LLC (the owner of the newspaper), Kevin McCallum (the author of the articles),^[1] and David McCuan (a professor quoted in one of the articles), asserting causes of action

The trial court granted the motion in part, denied the motion in part, and continued the motion in part to permit plaintiffs to conduct discovery on the issue of whether defendants acted with malice as to their statements regarding Flater. Defendants appealed, plaintiffs cross-appealed, and the media defendants petitioned for writ relief from the discovery order. We conclude the trial court should have granted defendants' Section 425.16 claim in full because plaintiffs failed to make a prima facie showing the allegedly defamatory statements in the articles were false.

BACKGROUND

Between October 20 and November 11, 2016, defendant newspaper The Press Democrat (owned by defendant Sonoma Media) published five articles written by defendant McCallum. The articles reported on a large amount of spending by plaintiff Flater on behalf of three candidates for the Santa Rosa City Council during the 2016 election. Defendant McCuan is a Sonoma State University political science professor quoted in the October 28 article. Plaintiffs allege the articles were defamatory because they implied that plaintiff Gallaher, a prominent local developer, was the source of the funds spent by Flater, his son-in-law.

The Press Democrat Articles

The first article, dated October 20, 2016, was entitled "Campaign finance gaps allow large donations in Santa Rosa council race." The article reported that candidates were "getting a big bump from big money interests this election." In addition to $75,000 raised by "[a]n independent anti-rent-control group," the article explained that "Scott Flater, the son-in-law of politically active developer Bill Gallaher, recently reported spending nearly $40,000 to help support two other candidates. . . . [¶] While he didn't give the money directly to either candidate, the contributions raise questions about whether Flater or people close to him are exploiting gaps between state and city campaign finance laws that limit individual campaign contributions to $500 each but allow `major donors,' such as Flater, to spend unlimited sums." The article quoted concerns expressed by one of the candidates about such independent expenditures, and the article reported that Flater had "fail[ed] to

An October 29, 2016 article was entitled "Outside money breaks record." Aside from the title, it is identical to the October 28 article.^[3]

A November 5, 2016 article was entitled "Complaint filed against big spender in Santa Rosa City Council race." The article commenced, "A Santa Rosa contractor has filed a complaint with the state political watchdog alleging that the son-in-law of a prominent Sonoma County developer has violated campaign finance laws with his role in the unprecedented influx of outside cash flowing into this year's Santa Rosa City Council race." The complainant was quoted as saying "he `strongly suspects' that the record spending by Scott Flater is fueled by money that has been `laundered and bundled' by others. [¶] `I think this is an attempt to avoid transparency. . .' . . . . `It's very hard to judge what the economic interests behind this are, which is the whole point of these disclosure requirements.'" The complainant was also reported to say that "Flater's late spending spree . . . has telltale signs of someone who has agreed to act as a front man for other[] donors, allowing them to shield their political contributions and potential economic interests in the race from public view." The article quoted the chairman of the Sonoma County Democratic Party as saying the spending "`raises the question as to whether all the money is actually being put in by Scott Flater or by someone else.'"

The November 5, 2016 article noted Flater's relationship to Gallaher and that Flater had spent "nearly $192,000 on mailers and canvassing in support of three of the six candidates for City Council." That spending "accounts for more than a third of the total in the race, including spending by candidates' campaigns." The article observed, "The record-breaking infusion of private cash into the race has highlighted the inequity between the $500 limits Santa Rosa puts on individual contributions to local campaigns and the unlimited amounts state law allows donors and groups to spend on independent expenditures not associated with candidates' campaigns." The article also reported that "Gallaher was cleared earlier this year of a similar complaint alleging" one of his companies "`engaged in campaign money laundering by making contributions in the name of'" persons who received reimbursement from the company.

The court concluded Flater was a limited purpose public figure and continued the motion to strike as to him to allow depositions of defendants McCallum and McCuan "only as to whether they reported on stated facts with ill-will or other improper motive as to" the October 28 and 29 articles. The court concluded Gallaher was not a limited purpose public figure, and, as we understand the decision, the court granted the motion to strike the defamation cause of action as to him except as to the October 28 and 29 articles.^[4] The trial court granted the motion to strike the libel per se and false light causes of action as "duplicative" of the defamation claim.

The media defendants appealed and plaintiffs cross-appealed (A152008); defendant McCuan filed a separate appeal (A152320). This court consolidated the appeals for purposes of briefing, oral argument, and decision. In July 2017, the media defendants filed a petition in this court seeking issuance of a writ that would, among other things, direct the trial court to vacate its order permitting plaintiffs to conduct discovery (A151968). This court issued an order to show cause, set a briefing schedule, and ordered the writ proceeding consolidated with the appeals and cross-appeal (A152008 and A152320) for purposes of oral argument and decision.

DISCUSSION

(1) "In 1992, the Legislature enacted [S]ection 425.16 in an effort to curtail lawsuits brought primarily `to chill the valid exercise of . . . freedom of speech and petition for redress of grievances' and `to encourage continued participation in matters of public significance.' (§ 425.16, subd. (a).) The section authorizes a special motion to strike `[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States [Constitution] or [the] California Constitution in connection with a public issue . . . .' (§ 425.16, subd. (b)(1).) The goal is to eliminate meritless or retaliatory litigation at an early stage of the proceedings. [Citations.] The statute directs the trial court to

The Press Democrat articles reporting on Flater's enormous independent expenditures, explaining Flater's connection to Gallaher, and raising questions about the source of the funds spent by Flater were clearly in connection with an issue of public interest. As the United States Supreme Court explained in Citizens United v. Federal Election Comm'n (2010) 558 U.S. 310 , 367 [ 175 L.Ed.2d 753 , 130 S.Ct. 876 ] ( Citizens United ), "`provid[ing] the electorate with information' about the sources of election-related spending. . . help[s] citizens `"make informed choices in the political marketplace."'" (Citation omitted; see also id. at p. 368 ["The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."].) In California, the Political Reform Act of 1974 (PRA; Gov. Code, § 81000 et seq.) requires, among other things, that "[r]eceipts and expenditures in election campaigns should be fully and truthfully disclosed in order that the voters may be fully informed and improper practices may be inhibited." (Gov. Code, § 81002, subd. (a); see also Agua Caliente Band of Cahuilla Indians v. Superior Court (2006) 40 Cal.4th 239 , 244 [ 52 Cal.Rptr.3d 659 , 148 P.3d 1126 ].) In Agua Caliente, the California Supreme Court observed, "The State of California has determined that the PRA is vitally important to its republican form of government." ( Agua Caliente, at p. 260; see also Griset v. Fair Political Practices Com. (1994) 8 Cal.4th 851 , 862 [ 35 Cal.Rptr.2d 659 , 884 P.2d 116 ] ["the state's interest in a well-informed electorate is a compelling one"].) Given the fundamental importance of the disclosure requirements, the media defendants' articles, which informed the voting public about Flater's spending and his connection to a prominent developer with likely business before the City Council, were indisputably of public interest.

The trial court correctly concluded that plaintiffs' claims arise out of activity protected by the anti-SLAPP statute and plaintiffs were required to demonstrate a probability of prevailing on their claims.^[6]

(5) Because plaintiffs' claims arise out of protected activity, they bore the burden of demonstrating "`"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."'" ( Navellier v. Sletten (2002) 29 Cal.4th 82 , 89, 88 [ 124 Cal.Rptr.3d 530 , 52 P.3d 703 ] ( Navellier ).) Plaintiffs' evidence must be "competent and admissible."

(6) "Defamation is an invasion of the interest in reputation. The tort involves the intentional publication of a statement of fact that is false, unprivileged, and has a natural tendency to injure or which causes special damage." ( Smith v. Maldonado (1999) 72 Cal.App.4th 637 , 645 [ 85 Cal.Rptr.2d 397 ].) "[W]here disputed statements involve matters of public concern, the plaintiff in a defamation action bears the burden of showing the statements the defendant made were false." ( Melaleuca, Inc. v. Clark (1998) 66 Cal.App.4th 1344 , 1355 [ 78 Cal.Rptr.2d 627 ]; see also Nizam-Aldine v. City of Oakland (1996) 47 Cal.App.4th 364 , 373 [ 65 Cal.Rptr.2d 781 ] [explaining that, under the 1st Amend., the "common law presumption that defamatory speech is false" is inapplicable where the allegedly defamatory statements "concern a matter of public interest"].)

(7) In opposing defendants' anti-SLAPP motion, plaintiffs submitted only two short declarations from Flater and Gallaher in order to demonstrate the falsity of the allegedly defamatory articles. Neither declaration addressed any campaign spending prior to the 2016 election, so plaintiffs necessarily failed to make a prima facie showing of the falsity of statements in the articles relating to past conduct. For example, the Complaint alleges as defamatory language attributed to defendant McCuan in the October 28 article to the effect that Gallaher has a "pattern" of "`sprinkling money around' to family members to maximize payments to-and potentially influence with-council candidates." The Complaint also emphasizes the portion of the article in which McCuan is quoted as saying, "`Bill Gallaher uses his family as a shell game, and has for a long time, in order to channel support to candidates of his liking . . . ." Plaintiffs failed to make a prima facie showing of falsity of those and any other statements in defendants' articles that made reference to plaintiffs' conduct prior to the 2016 election.^[7] (See Fashion 21 v. Coalition for Humane Immigrant Rights of Los Angeles (2004) 117 Cal.App.4th 1138 , 1153 [ 12 Cal.Rptr.3d 493 ] [defendant's "failure to produce any evidence on this issue, an issue on which it would bear the burden of proof at trial, leads us to

In their appellate briefing, plaintiffs do not deny independent expenditures are materially distinct from campaign contributions/donations. Instead, they assert "Flater's declaration addressed both contributions and independent expenditures." (Original boldface replaced with italics.) However, rather than citing to and quoting from the Flater declaration submitted in opposition to the anti-SLAPP motion, plaintiffs cite to a prior Flater declaration submitted in support of plaintiffs' motion to conduct discovery. In that declaration, dated May 10, 2017, Flater averred that "The money I donated to political candidates or the independent expenditure campaign during the 2016 Santa Rosa City Council elections belonged to me and my wife," and that "No one, including Mr. Gallaher, ever provided me with any money to donate to any political candidates or the independent expenditure campaign during the 2016 Santa Rosa City Council elections." In contrast, in the May 17 declaration subsequently submitted in opposition to the anti-SLAPP motion, Flater averred only that "the donations I made during the 2016 Santa Rosa City Council race were made on my behalf alone" and that "[n]o one, including, Mr. William Gallaher, ever provided me or my wife with any money to donate to any political candidates during the 2016 Santa Rosa City Council race." In their appellate briefing, plaintiffs fail to acknowledge the discrepancy, and they certainly have provided no authority that this court can ignore

(8) Although plaintiffs fail to clearly argue the point, their declarations did dispute an arguable implied assertion by defendant McCuan in the October 28 and 29 articles that the $1,000 donated by Flater and his wife in the 2016 election came from Gallaher. However, that was part of McCuan's overall assertion that "`for a long time'" Gallaher had a "pattern" of "`sprinkling money around' to family members to maximize payments to-and potentially influence with-council candidates."^[9] To the extent that included an implied assertion of wrongdoing, the assertion encompassed Gallaher's pre-2016 conduct, the 2016 donations by Flater and his wife, and Flater's 2016 independent spending, of which the $1,000 donation constituted a trivial amount. As explained in Vogel, supra, 127 Cal.App.4th 1006 , "`Minor inaccuracies do not amount to falsity so long as "the substance, the gist, the sting, of the libelous charge be justified."'" ( Id. at p. 1021, quoting Masson v. New Yorker Magazine (1991) 501 U.S. 496 , 517 [ 115 L.Ed.2d 447 , 111 S.Ct. 2419 ] ( Masson ); accord, Jackson v. Mayweather, supra, 10 Cal.App.Sth at p. 1262.)

In the present case, the sting of McCuan's alleged implied assertion was that Gallaher had a "`long time'" pattern of misconduct that continued in Flater's 2016 independent expenditures; it was that "unprecedented spending" that was the overwhelming focus of the October 28 article (and all the other articles). Plaintiffs' declarations, which did not even attempt to address Gallaher's pre-2016 conduct or the 2016 independent spending, did not demonstrate the "substantial falsity" of McCuan's statement. ( Vogel, supra, 127 Cal.App.4th at p. 1022; accord, Industrial Waste, supra, 4 Cal.App.5th at p. 1158.) "`Put another way, the statement is not considered false unless it "would have a different effect on the mind of the reader from that which the pleaded truth would have produced."'" ( Vogel, at p. 1021, quoting Masson, supra, 501 U.S. at p. 517; accord, Jackson v. Mayweather, supra, 10

The decision in Jackson v. Mayweather, supra, 10 Cal.App.5th 1240 , is instructive. The parties in the case were former boxing champion Floyd Mayweather, Jr., and his former romantic partner, Shantel Jackson, an "aspiring model and actress." ( Id. at pp. 1245-1246.) Jackson, as relevant here, sued Mayweather due to comments he made during a radio interview that "she had undergone extensive cosmetic surgery procedures." ( Id. at p. 1247.) Mayweather filed an anti-SLAPP motion, and Jackson averred in opposition to the motion that "he had falsely stated she had surgery to change her nose, chin and cheeks," which "tacitly concede[d]" that she had surgery on her breasts and buttocks. ( Id. at p. 1262.) The Court of Appeal held Jackson failed to make a prima facie showing of falsity because she "presented no evidence in opposition to Mayweather's motion, expert or otherwise, that would permit a finder of fact" to find "that surgical enhancement of the face is different for the reputation of an actress or model from the augmentation or sculpting of other parts of her body." ( Id. at p. 1263.) Accordingly, she failed to show Mayweather's comments had a different effect on the minds of listeners than the truth would have produced. ( Ibid. ) The same is true in the present case with respect to any false implied assertion that Gallaher was the source of the funds for the $1,000 donated by Flater and his wife in 2016.^[10]

"The sine qua non of recovery for defamation . . . is the existence of falsehood." ( Letter Carriers v. Austin (1974) 418 U.S. 264 , 283 [ 41 L.Ed.2d 745 , 94 S.Ct. 2770 ].) "[W]hile it would have been a simple matter to do so, plaintiff[s] submitted no declaration" showing the falsity of the actual allegedly defamatory focus of the media defendants' articles. ( Brodeur v. Atlas Entertainment, Inc. (2016) 248 Cal.App.4th 665 , 679 [ 204 Cal.Rptr.3d 483 ].) Because plaintiffs failed to make a prima facie showing that defendants' allegedly defamatory statements were false, defendants' anti-SLAPP motion should have been granted in its entirety with respect to plaintiffs' defamation claim. (See Nygård, supra, 159 Cal.App.4th at p. 1054 ["[I]f [the defendant's] version of events was inaccurate, plaintiffs could have submitted prima facie evidence of its falsity through the declaration of [plaintiff's chairman and founder]. Because plaintiffs did not do so, we conclude that plaintiffs

It is also necessary to address plaintiffs' libel per se and false light invasion of privacy causes of action. The trial court granted defendants' anti-SLAPP motion with respect to those claims "on the grounds they are duplicative to the" defamation claim. Plaintiffs argue on appeal that the trial court erred in dismissing those causes of action on that ground. However, plaintiffs do not argue that those claims arise out of different and unprotected conduct, or that those causes of action do not require a showing of falsity. Indeed, plaintiffs suggest the "general rule" is "that if one of the causes of action survives a special motion to strike, the other should as well, and vice versa." Accordingly, the libel per se and false light causes of action are subject to the anti-SLAPP statute and plaintiffs' failure to make a prima facie showing of falsity is fatal to them as well as the defamation cause of action. We will reverse in part and remand with instructions that the trial court grant defendants' motion and consider any request for attorney fees, including fees on appeal. (§ 425.16, subd. (c); Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180 , 186 [ 25 Cal.Rptr.3d 298 , 106 P.3d 958 ]; Tuchscher, supra, 106 Cal.App.4th at p. 1248.)^[11]

DISPOSITION

The trial court's order on defendants' Section 425.16 motion to strike is affirmed in part and reversed in part. The matter is remanded with directions that the court grant the motion in full. On remand, the trial court should consider any request for an award of attorney fees. Costs on appeal are awarded to defendants.