SLAPPs Against Small Business Owners

SLAPPs Against Business

  • In August of 2008, the law firm Jones Day sued Chicago’s, a site that reports on real estate transactions, often with descriptions of those buying and selling homes. Jones Day alleged trademark infringement and unfair trade practices based on Blockshopper’s use of Jones Day’s service marks, links to the Jones Day site and the use of its lawyers’ photos. To avoid the expense of litigating the suit against a large law firm, BlockShopper agreed to take down the three stories at issue temporarily, but Jones Day then refused to drop the complaint. In negotiations, Jones Day told BlockShopper it would drop the case if BlockShopper paid it $10,000 and agreed to never write about its lawyers’ real estate transactions again, but BlockShopper declined the offer and the suit proceeded. Trial was set for February 2009, and on January 30, the two parties settled on the condition that Blockshopper would no longer use embedded links when linking to the Jones Day site. Jones Day v. Blockshopper, 2008 U.S. Dist. LEXIS 94442.
  • In 2004, the president of a Hawaiian taxi company and 2004 Hawaii Small Business Person of the Year, Dale Evans, asked state officials to investigate reports of misconduct and possible illegal activities engaged in by another taxi company. Based on her assertion, the Hawaii Attorney General opened an investigation, found some minor wrongdoing and corrected the problems on site. The rival company responded by suing Evans for defamation based on the letter she sent to State officials. Evans moved to dismiss the lawsuit on the grounds that it violated federal and state constitutional rights to petition the government for redress of grievances. The trial court rejected the defense, holding the proper forum to decide the issue was the Supreme Court. Local advocacy groups argued that the delay was unjustified and only furthered the harm of the SLAPP. When the trial court did finally determine the merits of the case, Higa v. Evans, the judge called the lawsuit one of the most “frivolous” she’d seen, noting the plaintiff didn’t even show up to the trial, and agreed that Evans’ statements were protected.
  • In 2002, Wells Fargo dismissed an employee. The National Association of Securities Dealers (NASD), of which Wells Fargo is a member, requires members to provide a designated form when a registered employee is terminated. Wells Fargo filed the form in November 2002, noting that it terminated the employee for “violation of company policies by misrepresenting information in the sale of annuities, not being properly registered and firm procedures regarding annuity applications.” In 2003, the employee sued Wells Fargo, for, among other things, defamation and intentional interference with prospective business relations, based upon the statements Wells Fargo made in its required form. Wells Fargo brought a motion to dismiss under California’s anti-SLAPP law, asserting that the form was made before an official proceeding authorized by law, and thus immunized by California law. The trial court denied Wells Fargo’s motion to dismiss, but the appellate court reversed, agreeing that, because California law immunizes communication to the government, and the form qualified as such a communication, the employee could not show a probability of success on his claims of defamation and interference with business relations. The court dismissed the claims, and Wells Fargo was permitted to recover attorney’s fees incurred in defending against the claim. Fontani v. Wells Fargo Investments, LLC, 129 Cal. App. 4th 719 (2005).
  • In the early 2000s, DIRECTV sent demand letters to thousands of people who purchased certain devices that can pirate DIRECTV’s television programming, requesting the recipients cease using the devices. An attorney searched Internet sites promoting satellite television piracy to find a class of plaintiffs who were recipients of DIRECTV’s demand letters. The uncertified class sued DIRECTV, alleging that the conduct of mailing the demand letters was an unfair business practice under California law, a violation of plaintiffs’ civil rights, and extortion. DIRECTV brought a motion to strike under the California anti-SLAPP law, which the trial court granted. On appeal, plaintiffs argued that their suit should be outside the scope of the anti-SLAPP law because it was brought in the public interest. The court found that the suit was brought entirely for plaintiffs’ own gain, with little or no impact on the public, and that in any event, DIRECTV’s demand letters were pre-litigation statements protected by the California litigation privilege, and therefore not subject to civil liability. It affirmed the grant of the anti-SLAPP motion and allowed DIRECTV to recover attorney’s fees incurred in litigating the SLAPP. Blanchard v. DIRECTV, Inc., 123 Cal.App.4th 903 (2004).