Banking Defamation Statute Ruled Unconstitutional, Case Ruled a SLAPP
Ryan Metheny of the California Anti-SLAPP Project recently wrote about a new decision by California’s First Appellate District in a case called Summit Bank v. Rogers.
“Very interesting decision by California’s First Appellate District in a case called Summit Bank v. Rogers this week regarding a 100-year old criminal defamation statute, Financial Code section 1327, which makes it a misdemeanor for any person to make any untrue statement or circulate any untrue rumor that is “derogatory to the financial condition or affects the solvency or financial standing of any bank.” The statute, which has apparently been only very rarely enforced, was enacted with the purpose of preventing the types of runs on banks that caused financial panics before the creation of the FDIC.
This statute came into play in Rogers in the context of an anti-SLAPP motion and the subsequent appeal of the decision on the motion. Most commentators writing about the decision this week have remarked on the case’s invalidation of the banking statute under the First Amendment (see the First Amendment Center’s piece here and JD Supra’s piece here), so I will only address that part of the opinion briefly, but the case is also quite interesting for its anti-SLAPP and defamation law analysis. It is especially interesting how the anti-SLAPP law provided the procedural context for the court to decide the constitutionality of this strange old defamation law.”