Opinion
NOT TO BE PUBLISHED
Superior Court County No. SC088192 of Los Angeles, Richard Neidorf, Judge
David L. Cooper, Catherine E. Bennett and Jeffrey W. Noe; Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, for Appellant.
Jason M. Booth; Dongell Lawrence Finney for National Metal Steel Corporation, et al., Respondents.
Kenneth Bley; Cox, Castle & Nicholson for Charles Siroonian, Ecology Auto Parts, Inc., State Iron & Metal Co., Inc. and Pacific Rail Dismantling Services, Inc., Respondents.
YEGAN, J.
Jesus Vasquez appeals from the summary judgment entered in favor of respondents National Metal & Steel Corporation, Inc., Clean Steel, Inc., Joseph Davies, the law firm of Dongell Lawrence Finney Claypool,, LLP., and attorneys Richard A. Dongell and Joshua N. Levine on Vasquez's complaint for malicious prosecution. (Code Civ. Proc., § 437c.) By stipulation, judgment was also entered in favor of a second group of respondents (the Colton defendants): Pacific Rail Dismantling Services, Inc., Charles Siroonian, Ecology Auto Parts, Inc., and State Iron & Metal Co., Inc.
All statutory references are to the Code of Civil Procedure unless otherwise stated.
This action arises out an automobile shredder business (the Shredder) that was sold and moved from the City of Carson to the City of Colton. Vasquez claimed the Shredder endangered public health and distributed a flyer allegedly defaming the Carson owners/operators of the Shredder, collectively referred to as National Metal.
The Carson defendants are National Metal, Inc., Clean Steel, Inc., and John Davies, the acting president of National Metal, Inc. and Clean Steel, Inc. The Colton defendants are Pacific Rail Dismantling Services, Inc. and its owner Charles Siroonian, and Ecology Auto Parts, Inc. and State Iron & Metal Co.
Vasquez sued for malicious prosecution after National Metal's complaint for defamation and trade libel was dismissed under the anti-SLAPP statute. (§ 425.16.) The trial court granted summary judgment for National Metal, finding that National Metal had probable cause to file the underlying action for defamation. We affirm. (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 741-743.)
Facts and Procedural History
National Metal operated the Shredder in Carson for more than 20 years. In 1990, the property was rezoned to light industrial use. National Metal continued operations under a grandfather clause that expired December 31, 2003, at which time the scrap yard ceased doing business.
National Metal sold the Shredder to the Colton defendants (collectively referred to as PRI) which operated a scrap metal yard in Colton. After PRI applied for a permit to open the Shredder in Colton, Vasquez mounted a campaign against the project.
In August 2004, Vasquez distributed a flyer entitled "Poison for Profits – Colton Dying?" The flyer (attached as Exhibit A) bears a skull and crossbones logo and states: "The car shredder is being kicked out of the city of Carson, CA for non-compliance and the city [of Colton] is awaiting it with open arms." The flyer warns that the Shredder is a pollution monster: "MERCURY, LEAD,. COPPER, CADMIUM, ZINC, AND PCB's are deadly byproducts of the shredding operation and carried by dust, liquids, and air currents. These toxics will harm all people regardless of age."
National Metal sued for defamation and trade libel, alleging that the "flyer contains numerous false statements. For example, the flyer states that the Shredder is 'being kicked out of the city of Carson, California for non-compliance.' This statement appears on the flyer below a skull-and-crossbones and the phrase 'Poison for Profits.' A reasonable reader would interpret the statement to mean that the Shredder is being forced out of the city of Carson because of various violations of environmental regulations pertaining to public health."
Vasquez brought a special motion to strike under the anti-SLAPP statute (§ 425.16) which was granted January 10, 2005. He was awarded $32,916 attorney fees.
The SLAPPback Action
Vasquez then sued for malicious prosecution in what is known as a SLAPPback action. (§ 425.18.) "The purpose of a SLAPPback is to seek compensation for damages beyond the attorney's fees and costs awarded to the defendant who prevails on the special motion to strike under the anti-SLAPP statute. [Citation.]" (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 280 [damages for emotional and financial distress].)
National Metal moved for summary judgment on the ground that Vasquez could not show lack of probable cause to file the underlying action for defamation. The trial court, in granting summary judgment, concluded "that the spin of this flyer gave probable cause, made a tenable claim" for defamation and trade libel.
Probable Cause
To sue for malicious prosecution, a plaintiff must plead and prove that the underlying action was brought without probable cause and initiated with malice, and the underlying action was terminated in plaintiff's favor. (Crowley v. Katleman (1994) 8 Cal.4th 666, 676.)
The focal point of this appeal is probable cause which requires a determination of whether any reasonable attorney would have considered the action legally tenable based on the facts known to National Metal when it filed the complaint for defamation. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 885-886.) "This question is addressed objectively, without regard to the mental state of plaintiff or his attorney. [Citation.] The court determines as a question of law whether there was probable cause to bring the maliciously prosecuted suit. [Citation.] Probable cause is present unless any reasonable attorney would agree that the action is totally and completely without merit. [Citation.] This permissive standard for bringing suits, and corresponding high threshold for malicious prosecution claims, assures that litigants with potentially valid claims won't be deterred by threat of liability for malicious prosecution. [Citation.]" (Roberts v. Sentry Life Insurance (1999) 76 Cal.App.4th 375, 382.)
Collateral Estoppel
Vasquez claims that the anti-SLAPP order establishes lack of probable cause as a matter of law. The prior action, however, was dismissed because National Metal did not meet its burden under the "probability of prevailing" prong of the anti-SLAPP statute. (§ 425.16, subd. (b)(1); Jarrow Formulas, Inc. v. LaMarche, supra, 31 Cal.4th at p. 733.)
The order granting the special motion to strike states: "The Court finds that defendant [Vasquez] has sustained his initial burden under Code of Civil Procedure section 425.16 to show that the causes of action against him arise from the exercise of petition and speech rights, as defined in subdivision (e), and therefore section 425.16 applies. The Court further finds that the plaintiff [National Metal] has failed to provide any evidence that defendant's statement was defamatory or trade libel. The shredder was not in compliance with Carson's zoning requirements."
Although the dismissal constitutes a favorable termination, it does not establish lack of probable cause. (See e.g., Padres L.P. v. Henderson (2003) 114 Cal.App.4th 495, 517; Haydel v. Morton (1935) 8 Cal.App.2d 730, 733.) As discussed in Jarrow Formulas, Inc. v. LaMarche, supra, 31 Cal.4th 728, probable cause to commence an action may be present even where the plaintiff cannot prevail at trial. " ' "Counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win. . . ." ' [Citations.] " (Id., at pp. 742.) "[E]very case litigated to a conclusion has a losing party, but that does not mean the losing position was not arguably meritorious when it was pled. [Citation.]" (Id., at p. 743.)
Vasquez argues that no one was defamed because the Carson defendants are not identified in the flyer. Although National Metal is not specifically named, a reader would infer that the owners/operators of the Shredder were "kicked out" of Carson for violating environmental laws. There is no requirement that the person defamed be mentioned by name. (Di Giorgio Fruit Corp. v. AFL-CIO (1963) 215 Cal.App.2d 560, 569.) "It is sufficient if the publication points to the plaintiff by description or circumstance tending to identify him. [Citation.]" (Id., at pp. 569-570.)
Vasquez argues that no one receiving the flyer construed it to be defamatory. Vasquez, however offered no evidence on this issue or reference it in his separate statement of undisputed and disputed facts. The argument may not be asserted for the first time on appeal. (Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 472.)
Privileged Communication
Vasquez argues there was no probable cause to file the action because the flyer was absolutely privileged and distributed before a planning commission hearing. Statements made in a quasi-judicial or official proceeding that have some connection or logical relation to the proceeding are absolutely privileged. (Civ. Code, § 47, subd. (b); Hagberg v. California Federal Bank FSB (2004) 32 Cal.4th 350, 360-362; Silberg v. Anderson (1990) 50 Cal.3d 205, 212.)
Because Vasquez distributed several thousand copies of the flyer, not all attorneys would agree that each copy was a privileged communication. (See e.g., Rothman v. Jackson (1996) 49 Cal.App.4th 1134, 1149 [litigation privilege does not extend to "'litigating in the press'"]; Schneider v. United Airlines, Inc. (1989) 208 Cal.App.3d 71, 75 [defendant liable for foreseeable republication by third party]; 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 537, pp. 788-790.) Distribution of the flyer to nonresidents or to governmental agencies other than the Colton planning commission could be viewed as an abuse of the official proceedings privilege. (See e.g., Frisk v. Merrihew (1974) 42 Cal.App.3d 319, 326; Rothman v. Jackson, supra, 49 Cal.App.4th at p. 1146.) "[T]he 'connection or logical relation' which a communication must bear to [the official proceeding] in order for the privilege to apply, is a functional connection. That is to say, the communicative act -- be it a document filed with the [planning commission], a letter between counsel or an oral statement -- must function as a necessary or useful step in the [official proceeding] and must serve its purposes. This is a very different thing from saying that the communication's content need only be related in some way to the subject matter of the [official proceeding] . . . ." (Ibid.) If the rule was otherwise, a "resourceful slanderer" could lodge defamatory documents with a regulatory agency with the sole intent of having the documents republished in the media. (See Bradley v. Hartford Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 826.)
Vasquez declared that "several thousand copies of the flyer" were distributed "at the post office, grocery stores, churches, and many other public gathering places."
Vasquez claims the flyer was distributed in anticipation of a planning commission hearing but the flyer makes no mention of the hearing, the name and address of the planning commission, the hearing officers, or the hearing date. Nor has Vasquez demonstrated that every person receiving the flyer was an interested person. Like Rothman v. Jackson, supra, 40 Cal.App.4th 1134, trying one's case in the press or in a flyer is not necessarily a privileged communication. (See TSMC North America v. Semiconductor Mfg. Intern. Corp. (2008) 161 Cal.App.4th 581, 599 [statements to Chinese public and media concerning California litigation not privileged]; Susan A. v. County of Sonoma (1991) 2 Cal.App.4th 88, 93-94 [statements to press about judicial proceeding not privileged.)
In Silberg v. Anderson (1990) 50 Cal.3d 205, our Supreme Court held that Civil Code section 47(b) does not apply to communications to uninterested persons, and reaffirmed the principle that "republications to nonparticipants in the action are generally not privileged under section 47([b]), and are thus actionable unless privileged on some other basis." (Id., at p. 219.) The Court of Appeal in Nguyen v. Proton Technology Corp. (1999) 69 Cal.App.4th 140, 148-150, concluded that Silberg v. Anderson implicitly overruled cases cited by Vasquez for the proposition that his flyer is absolutely privileged. The point is that Civil Code "section 47(b) does not prop the barn door wide open for any and every sort of prelitigation charge or innuendo, especially concerning individuals." (Id., at p. 150.) When the cases are collectively considered in the context of this flyer and the manner in which it was distributed, reasonable attorneys would differ on whether the speech activity was absolutely privileged.
Special Damages
Vasquez contends that probable cause is lacking because the complaint is for libel per quod and does not allege that National Metal suffered special damages. (Civ. Code, § 45a; Slaughter v. Friedman (1982) 32 Cal.3d 149, 153-154.) Had National Metal sued for libel per se, damages would be presumed. (Selleck v. Globe International, Inc. (1985) 166 Cal.App.3d 1123, 1130.)
The argument fails because the statutory definition of libel per se is broad and includes "almost any language which upon its face, has a natural tendency to injure a person's reputation, either generally, or with respect to his occupation. [Citations.]" (Bates v. Campbell (1931) 213 Cal. 438, 441.) " '[L]anguage may be libelous on its face even though it may also be susceptible of an innocent interpretation. The test is whether a defamatory meaning appears from the language itself without the necessity of explanation or the pleading of extrinsic facts. If it does, "whether the charge be directly made or merely implied, the publication -- without averment, colloquium, or innuendo -- will, in itself, constitute a libel.' [Citations.] Perhaps the clearest example of libel per se is an accusation of crime. The courts have manifested liberality, at the pleading stage, in finding libel per se." (Barnes-Hind, Inc. v. Superior Court (1986) 181 Cal.App.3d 377, 384-385.)
Civil Code section 45 defines libel as "a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation."
The trial court found that "the skull and crossbones on the flyer may lead someone to believe by inference that [respondents] were kicked out of Carson for pollution, which is not true." We agree. National Metal ceased operations due to a zoning change. The "spin" of the flyer was that the prior owners/operators of the Shredder were kicked out of Carson for violating environment laws and moving the pollution "monster" to Colton. To drive the point home, the flyer bears a skull and crossbones logo and states that toxics generated by the Shredder "will harm all people regardless of age" and is "[t]he greatest threat to the entire community . . . ."
Injunctive Relief
Vasquez argues that probable cause is lacking because National Metal's complaint prays for injunctive relief. He contends that any reasonable attorney would know that a court cannot enjoin future speech without violating First Amendment prior restraint principles. But in Balboa Island Village Inn, Inc. v. Lemen (2007) 40 Cal.4th 1141, our Supreme Court held that an injunction may issue to enjoin a defendant from repeating defamatory statements about a business after the trier of fact has determined the speech is defamatory.
National Metal operated the Shredder under the name "Clean Steel," was a regional scrap metal recycler, and was concerned about its reputation in Carson and other cities. The complaint alleged that the flyer damaged its reputation "by falsely suggesting that National owns, operates, and is affiliated with dangerous, polluting, and illegal equipment." It further alleged, on information and belief, that Vasquez's activities were funded by a scrap yard competitor to keep the Shredder out of Colton. The trial court did not err in concluding that National Metal had probable cause to file the action for damages and injunctive relief.
Conclusion
As discussed, dismissal of National Metal's complaint under the anti-SLAPP statute did not establish lack of probable cause to commence the action. The trial court found that National Metal "may have lost it eventually, but I can't say it was initiated with malice. I can't say that they knew or should have known that the lawsuit couldn't be won." The court indicated that it may have ruled differently had National Metal gone "to a First Amendment lawyer that does nothing but this kind of work. . . ."
Absent evidence that National Metal consulted a First Amendment lawyer (see e.g., Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 822, fn. 6), probable cause is established "[i]f any reasonable attorney would have considered the action legally tenable . . . . [Citation.] This 'lenient standard' for bringing a civil action reflects 'the important public policy of avoiding the chilling of novel or debatable legal claims' and allows attorneys and litigants ' "to present issues that are arguably correct, even if it extremely unlikely that they will win . . . ." [Citation.] . . . Only those actions that ' "any reasonable attorney would agree [are] totally and completely without merit" ' may form the basis for a malicious prosecution suit. [Citation.]" (Padres L.P. v. Henderson, supra, 114 Cal.App.4th at p. 517.)
The judgment (order granting summary judgment) is affirmed. Respondents are awarded costs on appeal.
We concur: GILBERT, P.J., COFFEE, J.
Before the hearing on the summary judgment motion, Vasquez joined the Colton defendants as Does 11 through 14 based on the allegation that they "advised, assisted, encouraged and caused the filing and maintaining of the underlying action" When summary judgment was granted for National Metal, Vasquez stipulated the order "would apply equally to the action against [the Colton defendants] should they bring a similar motion."