2005-9

Employee Allowed To Recover Attorney Fees From Anti-SLAPP Motion Even Where Employer Dismisses Lawsuit

An employee who made comments critical of his former employer on an internet message board has been awarded attorneys' fees against the former employer, even though the former employer voluntarily dismissed its lawsuit against him. Scott Cargle is a former employee of iNEXTV, which is a wholly owned subsidiary of Ampex Corporation. Cargle was laid off in December of 2000 for economic reasons along with approximately 20 other employees. In August of 2001, Cargle posted a message on the internet message board for Ampex ? signed "Exampex" ? which is operated by Yahoo! It contained critical comments about iNEXTV, stating that it did market research after the website was launched, instead of before, criticizing its marketing and production work, and criticizing the President and Chairman of the Board, Edward Bramson.

Ampex and Bramson filed a libel suit in California naming "Exampex" as a DOE defendant. Cargle appeared and filed an anti-SLAPP motion and a request for attorneys' fees and costs. Once Bramson and Ampex learned the identity of Cargle as the person posting the message, they dismissed the complaint and filed a new action against Cargle in New York. At the hearing on the motion to strike and for attorneys' fees, the court ruled the voluntary dismissal terminated jurisdiction and made no ruling

Cargle appealed and the Court of Appeal reversed and remanded. On remand, the trial court denied the motion to strike and for attorneys' fees, concluding that the plaintiffs had demonstrated a probability that they would prevail on their claims because they established each element of libel per se. Cargle appealed again and the Court of Appeal reversed, finding the motion to strike should have been granted, and attorneys' fees awarded.

CCP ? 425.16 motions apply to causes of action arising from an act in furtherance of a person's right of petition or free speech under the Federal or State Constitution, in connection with a public issue. The first question is whether the cause of action arose from protected activity within the statute. The moving defendant bears the burden on that issue. Next, if the defendant makes the threshold showing, the burden shifts to the plaintiff to make a prima facie showing of facts that would sustain a favorable judgment.

The court found that Cargle met his burden, but Ampex did not. Cargle posted a note on a website that was accessible free of charge to the public where members could read and view information and post their opinions, and this met the definition of a public forum for purposes of section 425.16. The postings were about corporate activity, the company was publicly traded, there were over 59,000 shares outstanding, and the company had promoted itself to the public via a press release issued by the company.

The court also found that Ampex did not demonstrate a probability of prevailing on the merits. As to the President, the court noted that public figures must prove by clear and convincing evidence that an alleged defamatory statement was made with knowledge of falsity or reckless disregard for the truth. The court found the President to be a limited purpose public figure who voluntarily injected himself into a public controversy and was therefore a public figure on a limited range of issues. There was a public controversy that was being debated publicly - prior to the disputed message from Cargle, there were a number of postings on the message board criticizing Ampex's management and Bramson.

The content of the messages posted on the internet over a three day period showed that each message responded to another message with over 40 postings occurring in between. Finally, with 59,000 shares outstanding and concern over discontinuing Ampex's multimillion venture into the internet television business, this had a substantial ramification on the company. The court further found that Ampex and the President had inserted themselves into the controversy by the press release and letters posted on the website, stating among other things that the decision to discontinue iNEXTV was due to "adverse capital market conditions."

Ampex and Bramson contended they presented sufficient evidence to infer malice because the statements were posted after Cargle's employment terminated, and were in an angry and hostile tone. The court found the defendants did not carry their burden and that there was no evidence that Cargle's statement - he was laid off with 20 others for economic reasons - was false. The court found no basis for inferring spite. Cargle's detailed declaration set forth the basis for his statements and opinions, while the respondent's declarations only stated that certain statements were false. This is insufficient to establish a prima facie showing of malice. The court found that Cargle was the prevailing party on his motion and was entitled to attorneys' fees and costs as allowed under 425.16(c).

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