Summit Bank, a community bank headquartered in Oakland, California, sued Robert Rogers, its former vice president and chief credit administrator, for defamation alleging that he published false statements about the Bank with the intent to defame the Bank‘s “good name and reputation.” The suit was based on 21 allegedly defamatory posts made by Rogers over a two-month period in 2009 on the “Rant and Raves” section of Craigslist.org internet website. The statements were made under an anonymous name, later determined to be Rogers’s after Craigslist records were subpoenaed by the Bank. A few of Rogers’s colorful postings follow:
His June 7, 2009 post read: “Being a stockholder of this screwed up Bank, this year there was no dividend paid. The bitch CEO that runs this Bank thinks that the Bank is her personel [sic] Bank to do with it as she pleases. Time to replace her and her worthless son.
His June 21, 2009 post read: “Whats [sic] up at this problem Bank. The CEO provides a [sic] executive position to her worthless, lazy fat ass son Steve Nelson. [¶] This should not be allowed. Move your account now.”
His July 14, 2009 post read: “The FDIC and the California Department of Financial Institutions are looking at Summit Bank. This is the third time in less than one year. This is not a good thing, move your accounts ASAP.”
The Bank also alleged that Rogers’s statements were illegal under Financial Code section 1327, which imposes criminal liability when an “untrue statement or rumor” is made that is “directly or by inference derogatory” to a bank‘s financial condition. Rogers admitted to making the statements, but asserted that the statements were comprised of facts which were true and of opinion that he was entitled to express under the free speech guarantees of the First Amendment.
Rogers brought a motion under California’s “anti-SLAPP” law in which he asked the court to strike the Bank’s complaint on the grounds that the suit was brought for the illegitimate purpose of chilling his right to speak freely about the Bank. However, the trial court denied his motion finding that: (1) the statements made were not protected speech within the meaning of the anti-SLAPP law, and (2) the Bank had shown a probability of success on the merits of its defamation claim.
The California Court of Appeal had a different view. In its opinion on May 29, 2012, the Court ruled that “even if Rogers‘s speech violated the statute, it cannot be deemed ‘illegal as a matter of law’ because Financial Code section 1327 is an impermissible content-based restriction on speech protected by federal and state constitutional free speech guarantees.” [May 29, 2012 opinion of the California Court of Appeal] In doing so, the Court reached back to the origins of the 1917 statute. “Apparently, over a century ago, the (American Bankers) Association lobbied Congress and state legislatures to make the dissemination of untrue statements and rumors about the financial condition of commercial banks a criminal offense after several bank runs were ignited or exacerbated by published statements that occurred during the Bank Panic of 1907-1908.” Analyzing the statute under modern jurisprudence, the Court held that the statute was unconstitutional on its face because it is vague and overly broad and did not include a malice requirement for those banks that may be public figures, limit its reach to banks that are not, and failed to include “a clear requirement that the prosecutor prove defendant‘s knowledge of falsity or recklessness with regards to falsity.”
The Court determined that the subject matter of the posts were not outside the broad range of public discourse and were of public interest. “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.” The Court held that the anti-SLAPP statute applies to the Bank‘s defamation action against Rogers and that Rogers met his burden of showing that the Bank‘s defamation action arose from an act in furtherance of his constitutional right of free speech. Once this was established, the anti-SLAPP law requires that the burden be shifted to the Bank to show that it had a probability of prevailing on its defamation claim.
The Court then analyzed the subject matter of the defamation claim – the content of the Craigslist postings which “must be viewed from the perspective of the average reader of an Internet site such as Craigslist‘s ‘Rants and Raves,’ not the Bank or a banking expert who might view them as conveying some special meaning.” Citing to law review articles and case law in support, the Court concluded: “Looking at the actual language used in Rogers‘s posts, it is obvious Rogers‘s messages are intended to be free-flowing diatribes (or ‘rants’) in which he does not use proper spelling or grammar, and which strongly suggest that these colloquial epithets are his own unsophisticated, florid opinions about the Bank and its key personnel. This context further undermines the reader‘s expectation that the posts are to be understood as assertions of fact.”
Indeed, the Court went on stating that, “courts have frequently found the type of name calling, exaggeration, and ridicule found in Rogers‘s posts to be nonactionable speech. (See, e.g., Krinsky (v. Doe 6 (2008)), 159 Cal.App.4th (1154) at pp. 1159, 1173 [in a chat room setting, anonymous post that corporate officers consisted of a ‘cockroach,’ ‘losers,’ ‘boobs,’ and ‘crooks’ fell into the grouping of ‘crude satiric hyperbole which, while reflecting the immaturity of the speaker, constitute protected opinion’]).”
The Court stated further: “Rogers‘s statements that the Bank was mismanaged and rendered poor service and that the Bank‘s depositors would be well advised to move their accounts ‘before its [sic] too late’ and ‘before they close’ do not imply a provably false factual assertion to form the basis for a defamation action. Instead, as a matter of law, such statements constitute nonactionable opinions.” (Emphasis in original)
The Court held “that the statements on which the Bank‘s defamation claim is based are nonactionable statements of opinion, rather than verifiable statements of fact. Consequently, the Bank has not presented a prima facie case that the statements at issue, when viewed in the context of an Internet message board, are reasonably capable of a defamatory meaning or are substantially false.” Because the Bank failed to establish a likelihood of prevailing on its defamation claim, the trial court’s decision was reversed. The Court then delivered its sting. “Upon remand, the trial court shall issue a new and different order striking the Bank‘s complaint and shall enter an order awarding Rogers his attorney fees and costs.”
Chalk one up for free speech.