Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County Super. Ct. No. 06CC06053, Robert J. Moss, Judge. Affirmed.
Sedgwick, Detert, Moran, & Arnold and Frederick D. Baker for Defendants and Appellants.
Allen Matkins Leck Gamble Mallory & Natsis, Jeffrey R. Patterson, Matthew J. Marino and Stephen J. Kepler for Plaintiffs and Respondents.
OPINION
RYLAARSDAM, ACTING P. J.
Defendants Petrous LLC and Mark L. Oborn appeal from an order denying their motion to strike the complaint of plaintiffs RSI Holding Corporation and RSI Home Products, Inc. under Code of Civil Procedure section 426.16 (anti-SLAPP motion; all further statutory references are to this code). They contend the court erred when it concluded the challenged statements did not involve a public issue. We disagree and affirm.
FACTS AND PROCEDUAL HISTORY
Jerry Rose, not a party to this action, was the chief executive officer of RSI Home Products, Inc. (RSI Home), a wholly owned subsidiary of RSI Holding Corporation (RSI Holding). Alex Calabrese is the president and chief operating officer of RSI Holding and the chief executive officer of RSI Home and was Rose’s immediate superior. Plaintiffs manufacture bathroom and kitchen cabinets.
Rose organized a “‘leadership conference’” for certain of plaintiffs’ employees facilitated by defendant Oborn, one of the principals of defendant Petrous. A few months later, plaintiffs terminated Rose’s employment. In searching Rose’s company computer, plaintiffs found a nine-page report (report) Oborn had e-mailed to Rose “analyzing” Calabrese in the context of his employment. The report included statements that Calabrese’s “relationships will be shallow and he won’t be trustworthy[,] . . . mak[ing] him very dangerous to work with when he is in the position he is in”; and that “he is not focused on the strategic and leadership activities of capturing new opportunities and inventing the future.” It also implied he engaged in “inappropriate behavior.” The report set out methods for Rose to “significantly improve the relationship” with Calabrese, meet his “core needs,” and “clarif[y]” their respective roles. Oborn stated in his declaration in support of the anti-SLAPP motion that he showed part of the report to his secretary and discussed an “overview” of it with one of his partners. Except for sending it to Rose, he never otherwise disseminated it.
In a separate action that is being arbitrated, Rose sued plaintiffs for wrongful termination and other causes of action. He alleged that during his employment he learned RSI Holding had illegally copied a substantial amount of software and notified Calabrese of his objections to this. He also alleged RSI Holding had employed undocumented immigrants and asked Calabrese to conduct an internal investigation. A few months later, Rose was terminated; he claims this was based on Calabrese’s objections to both of the complaints he had made.
After finding the report, plaintiffs filed this action for, among other things, defamation, intentional interference with economic relations, unfair competition, and unjust enrichment. Defendants demurred and filed their anti-SLAPP motion, arguing the statements in Petrous’s report concerned a matter of public interest. The court denied the motion, finding that defendants’ conduct did not involve a public issue.
DISCUSSION
Section 425.16, subdivision (b)(1) provides a party may bring a special motion to strike any “cause of action against [that party] arising from any act [the party commits] in furtherance of the . . . right of petition or free speech under the United States or California Constitution in connection with a public issue . . . .” An “‘act in furtherance of a person’s right of . . . free speech under the United States or California Constitution in connection with a public issue’ includes: . . . any . . . conduct in furtherance of the exercise of the constitutional right of . . . free speech in connection with a public issue or an issue of public interest.” (§ 425.16, subd. (e)(4).)
The issue here is whether the statements in the report were made in connection with a public issue or one of public interest. In our de novo review (Ruiz v. Harbor View Community Assn. (2005) 134 Cal.App.4th 1456, 1466) we conclude they were not.
“‘The definition of “public interest” within the meaning of the anti-SLAPP statute has been broadly construed to include not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity. [Citations.]’ [Citations.] ‘Although matters of public interest include legislative and governmental activities, they may also include activities that involve private persons and entities, especially when a large, powerful organization may impact the lives of many individuals.’ [Citations.]” (Du Charme v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107, 115.)
Defendants rely on Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, which suggested three criteria to be considered in determining the existence of a public issue: whether the statements “concern[] a person or entity in the public eye,” “conduct that could directly affect a large number of people beyond the direct participants,” or “a topic of widespread, public interest.” (Id. at p. 924.)
In support of defendants claim the statements satisfy these factors they point to the following facts: Plaintiffs are in the public eye because they are nationally known and receive extensive coverage in the media. Plaintiffs have 3,500 employees and over $450 million in annual revenue; have manufacturing facilities in three states and Mexico; and are a major supplier to Home Depot and Lowe’s. They advertise for employees over the Internet, including on their own website. They tout their founder, Ronald Simon, as a modern day Horatio Alger who has been ranked as one of Orange County’s 25 richest people.
Defendants emphasize an allegation in the complaint that by disparaging Calabrese’s integrity, honest and business acumen, the report tended to injure plaintiffs’ business reputation. They also highlight a statement in Calabrese’s declaration in opposition to the motion that his and plaintiffs’ business reputations are critically important to the relationship with their customers and if the report was made public, it could seriously damage plaintiffs’ reputation. Thus, defendants assert, the pleadings have made the statements a matter of public interest.
As a threshold matter, defendants cannot rely on allegations in the complaint or Calabrese’s declaration to satisfy the public issue requirement. Rather, the statement themselves must be a matter of public interest. (See City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78 [acts underlying complaint must themselves have been in furtherance of free speech].)
Even taking the pleadings into consideration, however, defendants have not shown they fall within any of these criteria. First, plaintiffs are not in the public eye. That they issue press releases, have a presence on the Internet, and have several thousand employees and millions of dollars in revenue are merely generic facts that apply to countless other companies. They do not in and of themselves make the subject of the report a matter of public interest. None of the cases on which defendants rely found statements meriting protection of the anti-SLAPP statute just because the moving party issued press releases or had “the power to affect many lives.”
For example, in Ampex Corp. v. Cargle (2005) 128 Cal.App.4th 1569, in addition to the fact that the plaintiff issued press releases, it was a publicly traded company with over 59 million outstanding shares, and the statement at issue about the plaintiff’s management practices was posted on the plaintiff’s Yahoo! message board along with more than 112,000 additional messages on the same issue. (Id. at pp. 1576-1577.)
Likewise Troy Group, Inc. v. Tilson (C.D.Cal. 2005) 364 F.Supp.2d 1149, another case on which defendants rely, is factually distinguishable. The court noted the plaintiff regularly used press releases to promote itself. In addition, however, the plaintiff was a public company with millions of shares outstanding, and the defendant’s alleged defamatory statement was e-mailed to managers of stock funds and a reporter at the Wall Street Journal concerned a pending lawsuit about an attempt to take plaintiff private. (Id. at pp. 1151, 1153-1154.)
Similarly in Global Telemedia Intern., Inc. v. Doe 1 (C.D.Cal. 2001) 132 F.Supp.2d 1261, besides its many press releases, the plaintiff was a publicly traded company with 18,000 investors and was the subject of tens of thousands of postings on the Internet. The defendant’s numerous negative statements about the plaintiff’s performance posted on an Internet bulletin board were the subject of public interest because that performance would affect market sectors or entire markets. (Id. at p. 1265.)
Such is not the case here. The challenged statements were not published in a public forum, such as an Internet message board, a newspaper, or the like. Further, no one else published any statements dealing with the same issue. Moreover, plaintiffs are not public companies. And there is no evidence the statements will affect the market or even the cabinet-making segment of the market. Defendants have failed to show the statements at issue deal with “anything other than a private dispute between private parties.” (Weinberg v. Feisel (2003) 110 Cal.App.4th 1122, 1134.)
Second, the statements in the report do not describe conduct that could directly affect a substantial number of people beyond the immediate participants. “[I]n cases where the issue is not of interest to the public at large, but rather to a limited, but definable portion of the public (a private group, organization, or community), the constitutionally protected activity must, at a minimum, occur in the context of an ongoing controversy, dispute or discussion, such that it warrants protection by a statute that embodies the public policy of encouraging participation in matters of public significance.” (Du Charme v. International Brotherhood of Electrical Workers, supra, 110 Cal.App.4th at p. 119, fn. omitted.)
Defendants argue their statements “were made in the context of ongoing discussions and disputes among members of [plaintiffs’] management, which had originally prompted Rose to arrange the leadership conference and which had the potential to affect at least [plaintiffs’] employees, and possibly persons and markets far beyond . . . .” (Italics added.) They also claim the statements could reach vendors; prospective employees; communities where plaintiffs have their facilities; the “thousands of employees and millions of customers” of Home Depot and Lowe’s; and plaintiffs’ investors, including the publicly traded Lehman Brothers.
There is no evidence of any debate about the competence of plaintiffs’ management except to the extent defendants claim the leadership conference was scheduled, in part, because of “communications issues[] involving Rose and Calabrese.” At most, this involved a few people within management. Nothing in the record shows that this so-called debate involved the majority of plaintiffs’ employees or any vendors, shareholders, or customers of its customers, or that any of them had any knowledge of it or would be anything other than remotely affected by it, if at all. Defendants’ own speculative description of the potential impact of the statements highlights the weakness of their argument.
Finally, this simply is not a topic of wide public interest. Again, that plaintiffs publicize themselves and their management on the Internet and other media and the claims that plaintiffs’ reputations are critically important and could be severely injured by defendants’ statements are insufficient for all the same reasons discussed above.
Although proper management of a company may be a topic of general interest to plaintiffs’ customers and employees, it is not a matter of public interest within the purview of the statute. Moreover, it is not the issue here. And this type of argument has been rejected in cases with comparable fact situations.
For example, in Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO, supra, 105 Cal.App.4th 913, the plaintiff, a supervisor of janitors at the University of California, was fired after some of the janitors alleged he had committed misconduct. Their claims were then published by the union and distributed in circulars. In affirming denial of an anti-SLAPP motion, the court found the statements were not a matter of public interest. It rejected the defendants’ claims that unlawful workplace activity and abusive conduct by a supervisor are public issues, even though they might touch on public policy matters. (Id. at pp. 924-925.)
Likewise in Kurwa v. Harrington, Foxx, Dubrow & Canter (2007) 146 Cal.App.4th 841, the defendants, lawyers for the plaintiff’s former partner in a medical group, sent a letter to an HMO with whom the medical group had contracted seeking to have the HMO cancel the contract with the medical group and award it to their client, based on the claim plaintiff’s medical license had lapsed. The court affirmed denial of an anti-SLAPP motion, rejecting the claim that the letter concerned healthcare, a matter of public interest. It stated that the case involved only a “private matter between [the doctors] and the HMO which was ultimately concerned solely with the issue of who would . . . reap the substantial benefits of [the] agreement [with the HMO.]” (Id. at p. 848.)
Defendants work mightily to force their statements into the anti-SLAPP matrix but they just do not fit. This case is based on run of the mill allegations of defamation, which is not protected speech under the First Amendment (Weinberg v. Feisel, supra, 110 Cal.App.4th at p. 1131), and does not fall within the purpose of the anti-SLAPP statute, which is to curb the “disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional right[] of freedom of speech . . . .” (§ 425.16, subd. (a); see also Condit v. National Enquirer, Inc. (E.D.Cal. 2002) 248 F.Supp.2d 945, 954 [defendants cannot rely on anti-SLAPP statute “to gain immunity from alleged defamation”; statute designed to protect against “wrongfully intimidating meritless lawsuit designed to stifle desirable political or public speech.]”)
Without some topic of interest to even the limited public as defined by defendants, we cannot characterize alleged defamatory statements arising out of an internecine corporate dispute among a limited group of upper management as falling within the protections of the anti-SLAPP statute.
Defendants have not met their threshold burden to show the statements at issue were made “in furtherance of [their] constitutional rights of free speech in connection with a public issue.” (Du Charme v. International Brotherhood of Electrical Workers, supra, 110 Cal.App.4th at p. 112.) Therefore, we need not decide whether there is a reasonable probability plaintiffs will prevail on the merits. (Ibid.)
DISPOSITION
The order is affirmed. Respondents are entitled to costs on appeal.
WE CONCUR: MOORE, J. IKOLA, J.