Schwab v. Steiner CA2/7

Filed 8/18/20 Schwab v. Steiner CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
CHARLES R. SCHWAB, B289983
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC574505)
v.
LEONARD STEINER et al.,
Defendants and Appellants.
MICHAEL B. SCHWAB, B290001
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC573709)
v.
LEONARD STEINER et al.,
Defendants and Appellants.
APPEALS from orders of the Superior Court of Los Angeles
County, John P. Doyle, Judge. Affirmed.
Gordon Rees Scully Mansukhani, Craig J. Mariam,
Christina M. Vander Werf, and Raymond J. Muro for Defendants
and Appellants Leonard Steiner and Steiner & Libo, P.C.
Litvak Law Group, Uri Litvak and S. Martin Keleti for
Defendant and Appellant Nicholas Behunin.
Allen Matkins Leck Gamble Mallory & Natsis, Robert R.
Moore, Michael J. Betz, and Alexander J. Doherty for Plaintiff
and Respondent Charles R. Schwab.
Law Offices of David H. Schwartz, David H. Schwartz and
Nancy Chung; Law Offices of Michael Stepanian and Michael
Stepanian for Plaintiff and Respondent Michael B. Schwab.
_____________________________
INTRODUCTION
Charles Schwab and his son Michael Schwab each filed a
defamation action against attorney Leonard Steiner, his law firm
Steiner & Libo, P.C. (collectively, the Steiner defendants), and
the Steiner defendants’ client, Steve Behunin. In both cases the
defendants filed special motions to strike under Code of Civil
Procedure section 425.16,1 and they now appeal from the trial
court’s orders denying the motions. Because the allegations in
the Schwabs’ actions do not arise from activity protected by the
statute, we affirm.
1 Undesignated statutory references are to the Code of Civil
Procedure.
2
FACTUAL AND PROCEDURAL BACKGROUND
A. Behunin Files an Action Against the Schwabs and
Creates a Website To Induce Them To Settle
In 2014 Behunin, represented by Steiner, filed an action
against Charles and Michael over a dispute that arose after
Behunin and the Schwabs pursued several related business
ventures together, including developing and investing in real
estate in Indonesia. Behunin asserted various causes of action,
including fraud and breach of contract, based on allegations the
Schwabs did not fulfill promises to fund the real estate venture.
Behunin also described in his complaint details of the Schwabs’
alleged personal relationships with members of the family of
former Indonesian president Suharto.
After filing the action, Behunin, through Steiner, hired a
public relations firm, Levick Strategic Communications, to create
a social media campaign to induce the Schwabs to settle the case.
As part of the campaign, Levick created a website,
www.chuck-you.com, whose content linked the Schwabs to
corruption, human rights violations, and atrocities associated
with President Suharto and his family. As a senior vice president
at Levick described the firm’s task in a letter to Steiner and
Behunin, “Per our discussion with your client, Nicholas Behunin,
[Levick’s] goal will be to develop and deploy strategy and tactics
of Mr. Behunin’s legal complaint.” Levick referred to the project
as the “Chuck You Campaign.”
3
B. The Schwabs File Defamation Actions Against
Behunin and the Steiner Defendants
Upon learning of the website, Charles Schwab filed a libel
action against Behunin and the Steiner defendants. Describing
himself as “a well-known and widely-respected business leader
and investor and . . . the Chairman and founder of the Charles
Schwab Corporation, a brokerage and banking company,” Charles
alleged Behunin and Steiner created and published the chuck-
you.com website in an attempt to smear his reputation “by falsely
associating him with the misconduct committed by one of the
most brutal and corrupt dictators of the 20th century, former
Indonesian President Suharto.” Charles alleged Behunin and
Steiner’s objective was “to publicly embarrass and shame [him]
and then to leverage that public embarrassment into litigation
advantage in Behunin’s lawsuit against [the Schwabs].”
More specifically, Charles alleged that he is informally
known as Chuck, that the name of the website is a play on the
words “fuck you,” and that the website “stole the design and
format of Charles Schwab & Co., Inc.’s investment services
website ‘www.schwab.com’ and then replaced its content with
numerous false, misleading, and libelous statements about”
Charles. The allegedly libelous statements Charles cited were
“Looking to launder money overseas? Chuck can help!”; “Looking
to profit from a brutal dictator? Ask Chuck”; Charles was an
“international plunderer” and engaged in “exploitation abroad”;
“According to a complaint filed by a Schwab family insider,
Charles and [his wife] used their Foundation to indirectly fund
investment deals with the Suharto family”; “Charles Schwab and
the Suharto family purportedly acted as anchor investors in a
joint land investment venture known as the Emergent Indonesia
4
Opportunity Fund, with each investing $35 and $30 million,
respectively”; and “As reported by the LA Business Journal,
Charles Schwab and his heir, Michael Schwab, purportedly
worked on an investment deal with Tommy Suharto, son of the
brutal Indonesian dictator, over land in Bali obtained through
military force during his father’s presidency.”2 Charles also
alleged the website displayed “gory photos . . . from Indonesia’s
past” and “embedded videos relating to Suharto’s misconduct
juxtaposed with videos of [Charles]” that falsely connected him to
“Suharto’s crimes.”
Similarly, but in a separate action, Michael Schwab sued
Behunin and the Steiner defendants for libel, slander, and
invasion of privacy (false light) based on statements made on the
chuck-you.com website. The statements Michael cited were
“Michael came to know Tommy Suharto, son of the late
Indonesian President Suharto[, who] made an art of
manipulating the powers of the Indonesian government to enrich
his family”; “Michael Schwab purportedly worked on an
investment deal with Tommy Suharto, son of the brutal
Indonesian dictator, over land in Bali obtained through military
force during his father’s presidency”; and “Suharto’s grandson
Panji Adhikumoro Suharto is a business advisor to the Western
Mining Network, in which . . . Michael Schwab acquired a 15%
2 Regarding the statements about his and his wife’s
foundation, the Emergent Indonesia Opportunity Fund, and
Charles and Michael’s supposed investment deal with Tommy
Suharto, Charles alleged that “the Website framed these
statements as if it were simply reporting the accusations of some
presumably credible third party—when in fact the accusations
were from Steiner himself and/or his client” because their source
was the complaint in Behunin’s action against the Schwabs.
5
stake.” Michael alleged the website included “gory photos and
images from Indonesia’s tragic history” that “falsely associat[ed]
him with Suharto’s crimes,” such as an image of a “dead or dying
Indonesian covered in blood hang[ing] from a noose while another
is about to slam him over the head with a chair” as a “lynch mob
looks on, many of them smiling,” and an “image of a man who
appears to be Indonesian holding a rifle in one hand and giving
the ‘thumbs up’ with his other hand.”
In addition, Michael alleged that Behunin and Steiner
provided “false and defamatory information to third parties who
would post articles or blogs on the Internet repeating the false
and defamatory statements” and that Behunin and Steiner then
placed links on the chuck-you.com website that would take
visitors to those articles and blogs, “creating the impression that
the false statements on the Website had been independently
corroborated by the third-party posters.” One such third-party
poster, according to Michael, was Bruce Fein, “who writes a blog
that is available through the HuffingtonPost website.” Michael
alleged Fein posted a number of defamatory statements on this
blog, including “At some point in time, [Charles] Schwab’s son
Michael came to know Tommy Suharto, son of the late
Indonesian President Suharto”; “Michael Schwab . . . was
apparently thrilled at the prospect of collaborating with Tommy
[Suharto] to develop environmentally friendly upscale resorts on
Bali. To implement that collaboration, Michael formed a tax
exempt charity named Seathos, Inc. under section 501(c)(3) of the
Internal Revenue Code”; “Tax exempt Seathos has become a joint
investor in an L.L.C.—Sealutions—along with Charles and
Michael Schwab and arch-knave Tommy Suharto”; “A portion of
Sealutions profits would inure to Seathos”; and “Seathos’
6
collaboration with Tommy . . . would seem to contrary . . . to the
public policy of the United States against money laundering . . . .”
C. Behunin and the Steiner Defendants File Special
Motions To Strike Under Section 425.16
In both Charles’s and Michael’s actions, which the trial
court related, Behunin and the Steiner defendants filed separate
special motions to strike under section 425.16. After granting
Charles and Michael leave to conduct limited discovery under
section 425.16, subdivision (g),3 the trial court heard the four
special motions to strike and denied them. The court ruled that,
because the defendants failed to establish that Charles’s and
Michael’s actions arose out of activity protected by the statute,
the defendants did not carry their burden on the first step of the
analysis under section 425.16. The court rejected the defendants’
arguments the allegedly defamatory statements were made
before a judicial proceeding (§ 425.16, subd. (e)(1)), made in
connection with an issue under review by a judicial body
(§ 425.16, subd. (e)(2)), or made in a public forum in connection
with an issue of public interest (§ 425.16, subds. (e)(3), (e)(4)).
Behunin and the Steiner defendants timely appealed.
3 After the trial court overruled objections by Behunin and
the Steiner defendants to discovery requests for communications
among Behunin, Steiner, and Levick relating to the creation of
the chuck-you.com website, Behunin filed a petition for writ of
mandate to vacate that ruling, which we denied on the merits.
(Behunin v. Superior Court (2017) 9 Cal. App. 5th 833.)
7
DISCUSSION
A. Applicable Law and Standard of Review
Section 425.16, subdivision (b)(1), provides that “[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 shall be subject to a special motion
to strike, unless the court determines that the plaintiff has
established that there is a probability that the plaintiff will
prevail on the claim.” Courts evaluate special motions to strike
under section 425.16 “through a two-step process. Initially, the
moving defendant bears the burden of establishing that the
challenged allegations or claims ‘aris[e] from’ protected activity in
which the defendant has engaged. [Citations.] If the defendant
carries its burden, the plaintiff must then demonstrate its claims
have at least ‘minimal merit.’” (Park v. Board of Trustees of
California State University (2017) 2 Cal. 5th 1057, 1061 (Park).)
We review the trial court’s order granting or denying a special
motion to strike under section 425.16 de novo. (Monster Energy
Co. v. Schechter (2019) 7 Cal. 5th 781, 788.) “We exercise
independent judgment in determining whether, based on our own
review of the record, the challenged claims arise from protected
activity. [Citations.] In addition to the pleadings, we may
consider affidavits concerning the facts upon which liability is
based.” (Park, at p. 1067.)
8
B. Charles’s and Michael’s Actions Do Not Arise from
Protected Activity
Behunin and the Steiner defendants contend Charles’s and
Michael’s actions arise from protected activity because the
website and blog statements Charles and Michael allege as the
basis for their causes of action come within section 425.16,
subdivision (e)(3) or (e)(4). As relevant here, subdivision (e)(3)
protects any written statement “made in . . . a public forum in
connection with an issue of public interest,” and subdivision (e)(4)
protects “any other 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.” Under either subdivision of
section 425.16, then, Behunin and the Steiner defendants must
establish the statements on which Charles and Michael base
their actions were made in connection with a public issue or an
issue of public interest.4
In FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal. 5th
133 (FilmOn.com) the Supreme Court addressed how the context
of a statement “should feature” in deciding whether a statement
“furthers the exercise of constitutional speech rights in
connection with a matter of public interest.” (Id. at p. 149.) The
4 Although section 425.16, subdivision (e)(4), refers to “a
public issue” and “an issue of public interest” disjunctively, the
parties use these phrases interchangeably, and there appears to
be no substantive difference between them. (See Public
Employees’ Retirement System v. Moody’s Investors Service,
Inc. (2014) 226 Cal. App. 4th 643, 659 [applying the same standard
to “‘“the public issue/issue of public interest requirement of
section 425.16, subdivision (e)(3) and (4)”’”]; Du Charme v.
International Brotherhood of Electrical Workers (2003) 110
Cal. App. 4th 107, 119 [same].)
9
Supreme Court held: “The inquiry . . . calls for a two-part
analysis rooted in the statute’s purpose and internal logic. First,
we ask what ‘public issue or [ ] issue of public interest’ the speech
in question implicates—a question we answer by looking to the
content of the speech.” (Ibid.) “In articulating what constitutes a
matter of public interest,” we look to considerations “such as
whether the subject of the speech or activity ‘was a person or
entity in the public eye’ or ‘could affect large numbers of people
beyond the direct participants’ [citation]; and whether the
activity ‘occur[red] in the context of an ongoing controversy,
dispute or discussion’ [citation] or ‘affect[ed] a community in a
manner similar to that of a governmental entity.’” (Id. at
pp. 145-146.)
“Second, we ask what functional relationship exists
between the speech and the public conversation about some
matter of public interest.” (FilmOn.com, supra, 7 Cal.5th at
pp. 149-150.) “‘[I]t is not enough that the statement refer to a
subject of widespread public interest; the statement must in some
manner itself contribute to the public debate.’” (Id. at p. 150; see
id. at p. 151 [“a statement is made ‘in connection with’ a public
issue when it contributes to—that is, ‘participat[es]’ in or
furthers—some public conversation on the issue”]; Wilbanks v.
Wolk (2004) 121 Cal. App. 4th 883, 898 [section 425.16,
subdivisions (e)(3) and (e)(4), “are limited by the requirement
that the statement or conduct be connected with an issue of
public interest—a limitation that, among other things, means
that in many cases the statement or conduct will be a part of a
public debate and the public therefore will be exposed to varying
viewpoints on the issue”].) And “the inquiry of whether a
statement contributes to the public debate is one a court can
10
hardly undertake without incorporating considerations of
context—including audience, speaker, and purpose.”
(FilmOn.com, at pp. 151-152.)
As Behunin and the Steiner defendants repeatedly state,
we must construe section 425.16 “broadly” to effectuate its
purpose. (§ 425.16, subd. (a).) And we do so here, keeping in
mind the Supreme Court’s instruction that, “[b]ecause our
‘primary goal is to determine and give effect to the underlying
purpose of’ the . . . statute,” attention to “context matters.”
(FilmOn.com, supra, 7 Cal.5th at p. 154.) “It allows courts to
liberally extend the protection of the . . . statute where doing so
would ‘encourage continued participation in matters of public
significance,’ but withhold that protection otherwise.” (Ibid.)
1. The Statements Charles Alleged Were Libelous
Were Not Made in Connection with an Issue of
Public Interest
Behunin and the Steiner defendants argue the allegedly
libelous statements in Charles’s action were made in connection
with an issue of public interest within the meaning of section
425.16, subdivision (e)(4),5 because the statements (a) “relate to a
businessman and owner of a financial institution who extensively
promotes himself publicly,” (b) “relate to the financial world, a
topic in which there is a ‘profound public interest,’” and
(c) “question the trustworthiness of business owners with whom
the public entrusts its money.” These arguments do not hold up
5 Behunin and the Steiner defendants do not argue the
allegedly libelous statements in Charles’s action were made “in a
public forum,” as required by section 425.16, subdivision (e)(3).
11
under the two-part analysis prescribed by FilmOn.com, supra,
7 Cal.5th at pages 149 to 151.6
a. The Content of the Statements Did Not
Implicate a Public Issue
Although a statement may implicate a public issue because
its subject is a person or entity “in the public eye” (FilmOn.com,
supra, 7 Cal.5th at pp. 145-146; see Jackson v. Mayweather
(2017) 10 Cal. App. 5th 1240, 1254), not every statement about a
person in the public eye implicates a public issue (see Albanese v.
Menounos (2013) 218 Cal. App. 4th 923, 934 [rejecting the
argument “that any statement about a person in the public eye is
sufficient to meet the public interest requirement”]; D.C. v. R.R.
(2010) 182 Cal. App. 4th 1190, 1226 [“[n]o authority supports the
. . . broad proposition that anything said or written about a public
figure or limited public figure in a public forum involves a public
issue”]). Behunin and the Steiner defendants purport to cite
evidence suggesting Charles is in the public eye because he is
widely recognized as the eponymous founder and chairman of the
Charles Schwab Corporation.7 But the allegedly libelous
6 The Supreme Court has granted review in Geiser v. Kuhns
(Feb. 28, 2020, B279838) [nonpub. opn.], review granted July 22,
2020, S262032, to decide the following issues: How should it be
determined what public issue or issue of public interest is
implicated by speech within the meaning of section 415.16,
subdivision (e)(4), and the first step of the two-part test
articulated in FilmOn.com, supra, 7 Cal.5th at pp. 149-150, and
should deference be granted to a defendant’s framing of the
public interest issue at this step?
7 Behunin and the Steiner defendants cite a page of
Charles’s declaration in support of his opposition to the special
12
statements on the chuck-you.com website do not mention the
Charles Schwab Corporation or any activity by Charles in
connection with it; rather, they concern Charles’s personal
relationships and his investment activity unconnected with the
Charles Schwab Corporation. Behunin and the Steiner
defendants cite no evidence suggesting the public has any
interest in the latter aspects of Charles’s life.8 (Cf. Nygård, Inc.
v. Uusi-Kerttula (2008) 159 Cal. App. 4th 1027, 1042 [“‘an issue of
public interest’ within the meaning of section 425.16 . . . ‘is any
issue in which the public is interested,’” italics omitted).
Moreover, assuming “the financial world” and “the
trustworthiness of business owners” are issues of public interest,
motions to strike, where Charles stated: “I am the founder and
chairman of The Charles Schwab Corporation. The Charles
Schwab Corporation is in the business of providing securities,
banking, and financial advisory services in the U.S. and
elsewhere. I have led a successful career in the investment
industry for more than 50 years.” Otherwise, Behunin and the
Steiner defendants cite pages in the record that appear wholly
irrelevant or that do not constitute evidence (e.g., argument in a
memorandum of points and authorities).
8 That distinguishes this case from Nygård, Inc. v.
Uusi-Kerttula (2008) 159 Cal. App. 4th 1027, on which Behunin
and the Steiner defendants rely heavily. In that case the court
concluded that a statement in a Finnish magazine about the
private residence of Peter Nygård, “‘a prominent businessman
and celebrity of Finnish extraction,’” concerned a public issue
because there was evidence of “‘extensive interest’ in Nygård . . .
among the Finnish public,” including evidence of a “particular
interest among the magazine’s readership in ‘information having
to do with Mr. Nygård’s famous Bahamas residence which has
been the subject of much publicity in Finland.” (Id. at p. 1042.)
13
they are too abstractly and tangentially related to the specific
content of the allegedly libelous statements here. “It is true
enough that the various actions of a prominent CEO . . . —in the
abstract—seem to qualify as issues of public interest,” but “the
focus of our inquiry must be on ‘the specific nature of the speech,’
rather than on any ‘generalities that might be abstracted from it.’
[Citation.] Defendants cannot merely offer a ‘synecdoche theory’
of public interest, defining their narrow dispute by its slight
reference to the broader public issue.” (FilmOn.com, supra,
7 Cal.5th at p. 152; see Rand Resources, LLC v. City of Carson
(2019) 6 Cal. 5th 610, 625 [“At a sufficiently high level of
generalization, any conduct can appear rationally related to a
broader issue of public importance.”]; Price v. Operating
Engineers Local Union No. 3 (2011) 195 Cal. App. 4th 962, 972
(Price) [“‘there should be some degree of closeness between the
challenged statements and the asserted public interest [citation];
the assertion of a broad and amorphous public interest is not
sufficient’”]; Commonwealth Energy Corp. v. Investor Data
Exchange, Inc. (2003) 110 Cal. App. 4th 26, 34 [courts have
rejected “what might be called the synecdoche theory of public
issue,” in which “the part is [assumed] synonymous with the
greater whole”]; Consumer Justice Center v. Trimedica
International, Inc. (2003) 107 Cal. App. 4th 595, 601 [if “we should
examine the nature of the speech in terms of generalities instead
of specifics, then nearly any claim could be sufficiently abstracted
to fall within” section 425.16].) The statements Charles claims
were libelous were not about “the financial world” as a whole or
“the trustworthiness of business owners” in general, but about
the relationships and activities of a particular business owner in
the financial world. (See Bernstein v. LaBeouf (2019) 43
14
Cal. App. 5th 15, 24 [“While racism is undoubtedly an issue of
public interest, a defendant cannot convert speech that would
otherwise not be [subject to section 425.16] into protected activity
by ‘defining the[ ] narrow dispute by its slight reference to the
broader public issue.’”]; Commonwealth Energy, at p. 34 [speech
at issue was about a particular company’s investment
investigation services, “not about investment scams in general”];
Consumer Justice Center, at p. 601 [advertising claims for herbal
supplement promising breast enlargement were not about
“herbal supplements in general,” but “the specific properties and
efficacy of a particular product”].)
Behunin and the Steiner defendants cite Summit Bank v.
Rogers (2012) 206 Cal. App. 4th 669, a case decided seven years
before FilmOn.com. In Summit Bank the court, in determining
the challenged speech implicated a public issue, suggested there
was a public interest in “the financial world.” (Summit Bank, at
p. 694.) Behunin and the Steiner defendants’ reliance on Summit
Bank, however, is misplaced. First, Summit Bank is
distinguishable because of the specific nature of the speech in
that case: statements questioning a large bank’s “financial
stability and its management decisions.” (Id. at p. 694.) Such
statements about a financial institution more directly concern the
broader subject of “the financial world” than do statements about
the personal relationships and private activities of an individual,
even if that individual is prominent in the financial world.
Second, the court in Summit Bank did not hold that the public
has an interest in any and all aspects of “the financial world.” As
the court explained: “[I]n the wake of the 2008 economic
downturn, which ushered in widespread skepticism in the
underlying financial strength of our country’s financial
15
institutions, there has been a profound public interest in the
financial world, and a heightened interest in private banks.
[Citation.] In light of the recent financial meltdown of some of
our country’s largest and most trusted financial institutions, the
financial stability of our banking system is a legitimate object of
constitutionally protected public commentary, discussion,
criticism, and opinion.” (Ibid.) The statements in this case do
not relate to those aspects of “the financial world”—e.g., the
“stability of our banking system”—that the court in Summit
Bank identified as a matter of public interest.
Finally, the other relevant considerations identified by the
Supreme Court in FilmOn.com weigh against concluding the
speech at issue here implicated an issue of public interest.
Behunin and the Steiner defendants offer no evidence or
argument their allegedly libelous statements described matters
likely to affect large numbers of people beyond the direct
participants, occurred in the context of an ongoing controversy, or
affected a community in a manner similar to that of a
governmental entity. (See FilmOn.com, supra, 7 Cal.5th at
pp. 145-146.)
b. The Statements Did Not Contribute to
Public Debate
Even if Behunin and the Steiner defendants had succeeded
in identifying a public issue implicated by their statements, they
failed to address, let alone meet their burden under, the second
part of the FilmOn.com analysis: whether the statements, in
context, contributed to the public debate on the issue they
supposedly implicate. (FilmOn.com, supra, 7 Cal.5th at
pp. 149-150; see id. at p. 151 [“we examine whether a
16
defendant—through public or private speech or conduct—
participated in, or furthered, the discourse that makes an issue
one of public interest”].) Again, Behunin and the Steiner
defendants have not identified any relevant public debate. But if
even there were one, the allegedly libelous statements did not
meaningfully contribute to it. In fact, as Behunin and the
Steiner defendants argue elsewhere in their briefs, given the
fancifully crude address and overall tone of the website, “[a]n
average reader would not interpret these statements as
containing actual facts,” but would instead understand them to
be “nothing more than imaginative expressions of contempt.”
That the statements appeared on a publicly accessible
website does not, without more, mean they contributed to a
public debate. (See Bernstein v. LaBeouf, supra, 43 Cal.App.5th
at p. 24 [“a private dispute does not become a matter of public
interest simply because it was widely communicated to the
public”]; Grenier v. Taylor (2015) 234 Cal. App. 4th 471, 481
[“Mere publication on a Web site does not turn otherwise private
information into a matter of public interest.”].) Nor did the
statements appear in any Internet forum for consumer
information or review, which distinguishes the statements here
from those in two other cases Behunin and the Steiner
defendants rely on, Chaker v. Mateo (2012) 209 Cal. App. 4th 1138
and Piping Rock Partners, Inc. v. David Lerner Associates, Inc.
(N.D.Cal. 2013) 946 F. Supp. 2d 957. (See Chaker, at pp. 1142,
1146 [statements about a business owner’s character and
business practices were posted on the “Ripoff Report,” an
“Internet Web site where members of the public may comment on
the reliability and honesty of various providers of goods and
services”]; Piping Rock, at pp. 965-966 [derogatory statements
17
about a business owner’s business practices were posted on
“Ripoff Reports” and various other “consumer-report websites”].)
Finally, communications among Behunin, Steiner, and
Levick make evident that the focus and purpose of the campaign
of which the allegedly libelous statements were part was not to
contribute to any public debate, but to gain leverage against
Charles and Michael in the action Behunin had filed against
them. As an internal Levick email explained: “Nick [Behunin]
thinks that if we are successful in turning up the heat in
tarnishing the Schwab brand, Charles will be forced to settle
because of the potential implications to shareholder value,
regardless of whether the actual lawsuit has a leg to stand on.”
The communications also confirm one further purpose of the
campaign. After an early conversation with Behunin, a Levick
employee relayed “Nick’s Goals” to those working on the project.
The first entry: “I want to cause pain.” The second entry: “I
know this is a David and Goliath battle, but I will go to his last
penny and his last breath to just cause them pain.” Other entries
continue to focus on Behunin’s private grievances with the
Schwabs. This context does not support extending the scope of
section 425.16 to the statements by Behunin and the Steiner
defendants. (See FilmOn.com, supra, 7 Cal.5th at p. 154; Price,
supra, 195 Cal.App.4th at p. 972 [“‘the focus of the speaker’s
conduct should be the public interest rather than a mere effort
“to gather ammunition for another round of [private]
controversy”’”].)
Behunin and the Steiner defendants failed to establish that
Charles’s libel action arises from any protected activity in which
they engaged. The trial court did not err in denying their special
motion to strike under section 425.16.
18
2. The Statements Michael Alleged Were
Defamatory Were Not Made in Connection with
a Public Issue
To support their contention that the allegedly defamatory
statements in Michael’s action were made in connection with a
public issue, Behunin and the Steiner defendants offer largely
the same arguments they made in Charles’s action. The Steiner
defendants again argue the statements “relate to the financial
world” and “question the trustworthiness of business owners.”
Behunin argues that Michael and “the Suharto family” are “in
the public eye” and that the allegedly defamatory statements
“contain consumer information.”
In the first step of the FilmOn.com analysis—asking
whether the content of the statements implicated a public issue—
many of our conclusions about the statements in Charles’s action
apply with equal force. Hazy abstractions like “the financial
world,” “the trustworthiness of business owners,” and “consumer
information” are too general and distant to be the public issues
implicated by the statements. (See Rand Resources, LLC v. City
of Carson, supra, 6 Cal.5th at p. 625; Price, supra, 195
Cal.App.4th at p. 972.) And although Behunin cites a smattering
of journalistic interest in Michael’s investment activity to
demonstrate Michael is in “the public eye,” there is no evidence
this interest resulted in any more than two isolated published
pieces: a short business-journal profile predating the statements
by some 14 years and a 215-word notice in an Australian
newspaper of Michael’s intended investment in the Australian
company Western Mining Network. This evidence, by its
scarcity, tends to demonstrate a lack of widespread public
interest in Michael.
19
Whether, as Behunin argues in Michael’s case, the
statements implicated a public issue because Tommy (and
possibly Panji) Suharto’s wealth and investment activities are “in
the public eye” is a closer question.9 (See Hall v. Time Warner,
Inc. (2007) 153 Cal. App. 4th 1337, 1347 [“widespread public
interest in his personal life made [Marlon] Brando’s decisions
concerning the distribution of his assets a public issue,” and
“[a]lthough [the plaintiff] was a private person and may not have
voluntarily sought publicity . . . , she nevertheless became
involved in an issue of public interest by virtue of being named in
Brando’s will”].) But again, even if the allegedly defamatory
statements in Michael’s action implicated a public issue, Behunin
and the Steiner defendants did not address whether the
statements had a “functional relationship” with “the public
conversation” on that issue. (FilmOn.com, supra, 7 Cal.5th at
pp. 149-150.) That is, they again ignore the second part of the
FilmOn.com analysis, despite the fact Michael dedicates several
pages to it in his brief. And considering the statements’ context,
including the speaker, audience, and purpose, the statements did
not contribute to the public debate on any issue Behunin and the
Steiner defendants have identified.
As discussed, the chuck-you.com website’s “imaginative,”
non-factual tone and undisputed goals of obtaining leverage in a
personal controversy and causing the Schwabs personal pain
suggest the statements on the website did not contribute to any
public debate. The same conclusion holds for the allegedly
defamatory statements that appeared on Fein’s blog. There is no
evidence Fein wrote the post in which the statements appeared
9 Behunin does not make this argument for the allegedly
libelous statements in Charles’s action.
20
because he thought the material was newsworthy or appealed to
any interest of the public. Rather, the undisputed evidence—
emails exchanged among Levick’s employees, Fein, Behunin, and
Steiner—shows Fein wrote the post because Levick, on Behunin’s
behalf, paid him $10,000 to do it. Levick fed Fein information it
wanted to highlight for its “Chuck You Campaign.” Levick, with
Behunin’s assistance, “fact check[ed],” “vett[ed],” and added to
the final product. (Levick’s director to Behunin: “[D]oes Seathos
still exist? Or does he need to change the target?”) Levick and
Behunin’s purpose? To “put blood in the water” and make “web
traffic for the Chuck You site increase significantly.” Like the
allegedly defamatory statements on the chuck-you.com website,
the statements on Fein’s blog were thus “‘a mere effort “to gather
ammunition for another round of [private] controversy.”’’ (Price,
supra, 195 Cal.App.4th at p. 972.)
Behunin and the Steiner defendants did not establish that
Michael’s action arises from any protected activity in which they
engaged. Therefore, the trial court did not err in denying their
special motion to strike under section 425.16.
21
DISPOSITION
The orders denying the special motions to strike are
affirmed. Charles and Michael are to recover their costs on
appeal.
SEGAL, J.
We concur:
PERLUSS, P. J.
DILLON, J.*
* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
22