The Judgment Against Ilena Rosenthal

Original case:SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN DIEGO

ILENA ROSENTHAL, Plaintiff,
Vs.
AMERICA-ON-LINE;McGHAN CORPORATION;
INAMED CORPORATION; PATRICK O'LEARY,
SUSAN SCHAEZLER; ETC INFORMATION SERVICES;
AND DOES 1 THROUGH 20, INCLUSIVE,
                                        Defendants

COMPLAINT FOR:
Defamation
Negligence
Intentional Infliction of Emotional Distress
Negligent Infliction of Emotional Distress
Injunctive Relief
~~~~~~~~~~~~~~~~~~~~~~~
Court of Appeal, Fourth Appellate District
Division One  
State of California  
 Ilena Rosenthal, Plaintiff and Respondent,   v.   Patrick O'Leary, Defendant
and Appellant
  D036457  (Super. Ct. No. GIC 739307)   APPEAL from an order of the Superior
Court of San Diego County, William C. Pate, Judge.  Reversed with directions.
 

 Ilena Rosenthal brought a defamation action against Patrick O'Leary arising
out of statements O'Leary made on an internet newsgroup forum.   O'Leary filed
a special motion to strike the complaint pursuant to Code of Civil Procedure
section 425.16 but, while the motion date was pending,  Rosenthal dismissed the
action without prejudice.  (All further statutory references are to the Code of
Civil Procedure unless otherwise specified.)   Thereafter, O'Leary sought to
recover his attorney fees incurred in bringing the motion to strike, but the
superior court denied his motion. He appeals the resulting order, contending
that the trial court erred in finding that Rosenthal had established the
probability of prevailing on her defamation claim.  We agree and reverse the
order.  
 FACTUAL AND PROCEDURAL BACKGROUND  
Rosenthal is an activist for the rights of women who have had breast
implant surgery.  She is the director of the San Diego Humantics Foundation
for Women and heads an International Silicone Support Network.  
She established  the Internet News Group (alt.support.breast-implant),
a website forum designed to provide information and support to women
who had, or wanted information about, implants.

On the forum, Rosenthal posted her views about the dangers of breast
implants and the falsity of the information provided by silicone
manufacturers to the public about the complications from having
breast implants.   O'Leary was an officer of McGhan Medical Corporation,
a manufacturer of silicone breast implants.

Using the internet name "MPLNT" and claiming to be a "caring professional,"
O'Leary began to post his own messages on the forum  and at other internet
sites, challenging Rosenthal's theories and assertions.   A number of O'Leary's
messages were caustic and included personal barbs and insults against
Rosenthal.   After O'Leary posted messages anonymously on the forum for four or
five years, Rosenthal discovered his identity when he forwarded to her a crude
message he had received from someone else.  Shortly thereafter, Rosenthal filed
this action against him and others for defamation, negligence, intentional and
negligent infliction of emotional distress and injunctive relief.  O'Leary
filed a special motion to strike Rosenthal's complaint pursuant to section
425.16, Rosenthal dismissed her action without prejudice before the motion was
heard.  O'Leary then filed a motion seeking to recover attorney fees and costs
of $8,370.50 for preparing the motion to strike.

The superior court found that O'Leary was entitled to a ruling on his request
for attorney fees notwithstanding the dismissal of the action, but denied the
request on  the ground that Rosenthal had established the probability of
prevailing on the merits of her claims.  O'Leary appeals.  
 

DISCUSSION  

1.         Section 425.16   Section 425.16 establishes a
procedure that allows a trial court "to dismiss at an early stage non
meritorious litigation meant to chill the valid exercise of the constitutional
rights of freedom of speech and petition in connection  with a public issue.
[Citation.}" (Sipple v. Foundation for Nat. Progress (1999) 71 Cal.App.4th
226,235.) Such a non meritorious action is referred to as a "strategic lawsuit
against public participation," or SLAPP, suit.   (Ibid.) To further the
legislative goals of encouraging participation  in matters of public
significance and discouraging abuse of the judicial process, the courts
"broadly" construe section 425.16, which is known as the anti-SLAPP statute.

(& 425.16, subd. (a).)   Pursuant to section 425.16, the defendant may bring a
special motion to strike any cause of action against him arising from his acts
"in furtherance of the person's right of petition or free speech under the
United States or  California Constitution in connection with a public issue  Ç
."
(&425.16, subd. (b)(1).) In support of the motion, the defendant must "make
an initial prima facie showing that the plaintiff's suit arises from an act in
furtherance of  [his] right of petition or free speech.  [Citation.]" (Braun v.
Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1042-1043.) If the
defendant meets this burden, the trial court must grant the special motion to
strike the complaint unless the plaintiff establishes a reasonable probability
that  she will prevail on the merits.  (&425.16, subd. (b)(a); Wilcox v.
Superior Court (1994) 27 Cal. App.4th 809, 824-825.)   A defendant who prevails
on a special motion to strike is entitled to recover attorney fees and costs
incurred in bringing the motion.  (& 425.16, subd.  (c); Lafayette
Morehouse,Inc. v. Chronicle Publishing Co. (1995) 39  Cal.App.4th
1379,1382-1384; compare Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996)
47Cal. App.4th 777, 785 [statute authorizes award of fees so as to adequately
compensate the defendant for having to respond to a baseless lawsuit].)  Under
such circumstances, the award of fees and costs is mandatory.  (& 425.16,subd.
(c).)    Where, as here, the plaintiff voluntarily dismisses her lawsuit while
a special motion to strike it is pending, appellate decisions have recognized
that the trial court may nonetheless award attorney fees and costs to the
moving defendant pursuant to the anti-SLAPP statute.  In Coltrain v. Shewalter
(1998) 66 Cal.App.4th94 (Coltrain), after the plaintiffs' dismissal of their
complaint while a special motion to strike it was pending, the trail court
awarded the defendants attorney fees pursuant to section 425.16,  subdivision
(c).  

The plaintiffs appealed, arguing that the defendants were not entitled to
recover fees because they had not prevailed on the special motion to strike.
(Cotrain, supra, 66 Cal.App.4th at p. 101.) Based on a  review of authorities
determining the issue of who is the "prevailing party" in the event of a
voluntary dismissal of the case, the appellate court rejected the plaintiffs'
argument.  It concluded that, for purposes of applying section 245.16,
subdivision  (c),  the trial court had the discretion to  determine whether the
defendant was the prevailing party and thus entitled to recover fees.
(Coltrain, supra, 66 Cal.App.4th745 at pp. 101-108.)  The court indicated that,
in exercising its discretion, the critical issue for the trial court's
determination was which party realized its objectives in  the litigation.  (Id.
at  p. 107.).   Faced with a similar issue, the court in Liu v. Moore (1999) 69
Cal. App.4th 745 analyzed section 425.16, subdivision  (c) differently.  In
that case, the trial court denied the motion for attorney fees because the
statute allowed fees only to a party who prevailed on a special motion to
strike and, because the alleged SLAPP pleading (in that case a cross-complaint)
was dismissed prior to a hearing on the special motion to strike, the moving
cross-defendant was not entitled to recover fees.  The appellate court
reversed, holding that  the cross-defendant was entitled to have the merits of
her special motion to strike heard as a necessary predicate to a determination
of her request for attorney fees and costs under section 425.16,subdivision
(c).  (Liu v. Moore,  supra, 69Cal.App.4th at pp. 750-753; see also Kyle V.
Carmon (1999) 71Cal.App.4th 901, 918-919.)   In its analysis, the court
recognized that pursuant to the language of section 425.16, subdivision  (c),
the requesting party's entitlement to fees turns on the merits of the
defendant's motion to strike.  "An award of [fees and costs] under
section425.16 is only justified when a defendant  demonstrates that plaintiff's
action falls within the provisions of subdivision (b) and the plaintiff is
unable to establish a reasonable probability of success. [Citation.]  Until a
court determines that these circumstances exist, a moving defendant is not
entitled to its fees and costs under section 425.16. If such a judicial
determination were not first  required, and a fair procedural opportunity to
obtain it allowed, then a plaintiffs voluntary dismissal of the action could
have the effect of (1) depriving a true SLAPP defendant of statutorily
authorized fees, or (2) entitling a defendant to such relief in a non-SLAPP
action [that] was dismissed by the plaintiff for entirely legitimate reasons.
In both  situations, the purpose of the statute's remedial provisions would be
frustrated." (Liu v. Moore, supra, 69 Cal.App.4th at pp. 752-753.)

  Pursuant to the Liu court's analysis, the trial court must make a
determination on the merits of the special motion to strike before or in
conjunction with ruling on the moving party's request for attorney fees.  
 This interpretation comports with the express language of the statute, which
provides for the recovery of fees and costs by "a prevailing defendant on a
special motion to strike  Ç ." (&426.15,subd. (c).) It also recognizes that, if
the statutory prerequisites are met, the recovery of attorney fees and costs by
the moving party is made as a matter of right rather than as a matter of an
exercise of discretion by the trial court, as suggested in Coltrain. The
analytical approach of Liu also is in keeping with well-established authorities
holding that the trial court's determination as to whether the statutory
prerequisites for an award of fees are met is subject to de nova review on
appeal, whereas the approach in Coltrain requires an abuse of discretion
standard of review of a trial court's decision to award fees.  (Damon v. Ocean
Hills Journalism Club (2000) 85 Cal.App.4th 468, 474;  see also Aquino v.
Superior Court (1993) 21Cal.App.4th 847, 850, 855; compare Galan v. Wolfriver
Holding Corp.(2000) 80 Cal.App.4th 1124, 1129 [determination of prevailing
party for purposes of awarding attorney fees is a  discretionary matter with
the trial court and is subject to review on appeal for abuse of discretion].)
For these reasons, we find that the analytical model discussed in Liu applies
in determining the matter before us.    Here, in conjunction with O'Leary's
motion for attorney fees and costs, the parties fully briefed and the trial
court adjudicated the merits of O'Leary's special motion to strike.  The trial
court found that O'Leary met his initial burden to shot that the anti-SLAPP
statute applies to Rosenthal's claims and Rosenthal has not filed across-appeal
challenging the court's finding.
 Accordingly, the focus of this appeal is on whether Rosenthal established a
probability of prevailing on her claims.  On this issue, we independently
review the record to determine whether Rosenthal established a probability
that she would prevail on her claims, i.e., made a prima facie showing of facts
that would, if proven at trial, support a judgment in her favor.   (Church of
Scientology v. Wollersheim (1996) 42 Cal.App.4th628, 646.)  
 

2.         Probability of Prevailing  
Each of Rosenthal's claims against O'Leary is premised on alleged defamation.  
Defamation is the intentional publication of a statement of fact that is  false
and unprivileged and that has a natural tendency to injure or causes  special
damage.  (Smith v.Maldonado (1999) 72 Cal.App.4th 637, 645; Civ.
Code  && 45,46.) Where, as here, the plaintiff claiming to have been
defamed is a  public figure, it is not sufficient for her merely to show that the
defendant  made false, injurious statement; rather, to succeed on her claim
at trial,  the plaintiff must also prove, by clear and convincing evidence,
that  the defamatory statement were made with "actual malice," i.e., knowledge
that  the statements were false or reckless disregard of whether they were.    

(Reader's Digest Assn. V. Superior
Court(1984) 37 Cal.3d 244, 256,  citing New York Times Co. v. Sullivan (1964)
376U.S. 254, 279,280.) To  establish a reasonable probability of prevailing on
her defamation claim  against O'Leary, Rosenthal was required to make a prima
facie showing of facts that would, if credited, be sufficient to support a
judgment in her favor.    (Conroy v. Spitzer (1999)70 Cal.App.4th 1446, 1451;
see College Hospital,  Inc. v. Superior Court (1994) & Cal.4th 704, 719-720,
fn. 6.) In  determining whether Rosenthal has met her burden, we may not weigh
the  evidence or determine questions of credibility, but must accept all
admissible  evidence favorable to her as true and indulge in every legitimate
favorable  inference that may be drawn from it.  (Wilcox v. Superior Court,
supra, 27  Cal.App.4th at pp. 827-828; see College Hospital Inc. v. Superior
Court,  supra, 8 Cal.4th at pp 719-720, fn.6.)   A.  Defamatory Statements   A
viable claim for defamation must be based on the existence of statements  that
contain express or implied false assertions of fact. (Milkovich v. Lorain
Journal Co. (1990) 497.U.S. 1, 16, 21; compare Gregory v. McDonnell Douglas
Corp. (1976) 17 Cal.3d 596, 600 (Gregory).) The determination of whether the
statement alleged to be defamatory will support such a claim is a question of
law and will often turn on the context in which the statement was made.  
(Milkovich v.Lorain Journal Co., supra, 497 U.S. at p. 17; Gregory,  supra, 17
Cal.3d at p.601.) What constitutes an actionable statement in one  context may
be nonactionable in another, depending on "the nature and content  of the
communication taken as a whole." (Gregory, supra, 17 Cal.3d at p. 601.)  "[In
the context of} a public debate, a heated labor dispute, or in another  setting
in which the audience may anticipate efforts by the parties to  persuade others
to their positions by use of epithets, fiery rhetoric or  hyperbole," language
that in another context might be considered defamatory  may be protected
speech.  (Ibid; Greenbelt Pub. Ass. V. Bresler (1970)398  U.S. 6, 14
{newspaper's publication of a statement that a  developer's negotiating
position with a city was "blackmail" was not  defamatory where "even the most
careless reader must have perceived that the  word was no more than rhetorical
hyperbole, a vigorous epithet used by those  who considered [the developer's}
negotiating position extremely  unreasonable."].)  The nature of the statement
" Ç is to be measured not so  much by its effect when subjected to the critical
analysis of a mind trained  in the law, but by the natural and probably effect
upon the mind of the  average reader."  (Morningstar, Inc. v. Superior Court
(1994) 23 Cal.App.4th  676, 688, quoting Edwards v. Hall (1991) 234 Cal.App.3d
886, 903, fn. 14.)            
 
        The evidence submitted by the parties showed the O'Leary posted the following
statements about Rosenthal: (1) a statement that she should "quit ripping off
the American public with [her] tax [exempt,] give it all to me schemes"; (2) a
comment that she "couldn't find her butt with both hands" in connection with
her attempts to identify him; (3) a posting raising innuendoes about her sexual
preferences and/or practices; (4) remarks referring to her as "Die Fuhrerin";
and (5) statements referring to her publications as "crap."  In his reply
relating t the special motion to strike, O'Leary admitted that the evidence
also "definitively attribute[d]" to him statement that Rosenthal was "a fraud."

        Given the nature of the foregoing remarks and the context in which O'Leary
made them (i.e., during the course of heated and personal exchanges between
participants who hold diametrically opposed beliefs on the health-related
effects of breast implants), a person reading the remarks would not reasonably
have construed them as implying actual facts about Rosenthal (for example, that
Rosenthal was actually ripping off the American public through her tax exempt
organization, that she really was unable to "find her butt with both hands,"
etc.).  Under the circumstances, the statement could reasonably be perceived
only as vigorous epithets and invective not altogether uncommon in the debate
of an emotionally charged public issue.  (See Beilenson v. Superior Court
(1996) 44 Cal.App.4th 944, 951-952 [campaign mailer charging an opposing
candidate with "ripping off" California taxpayers by maintaining a private law
practice while on the public payroll held to be rhetorical hyperbole].) As
such, Rosenthal's evidence fails to establish the existence of defamatory
statement by O'Leary.

A. Conspiracy

Rosenthal also seeks to establish a reasonable probability of prevailing on her
defamation claim against O'Leary by arguing that O'Leary conspired with
codefendant Susan Schaezler and their alleged "shill," Linda Reiter, to defame
her.  On this basis, Rosenthal contends that O'Leary is liable for Schaezler's
and Reiter's statement, some of which might be construed to include express or
implied false assertions of fact about Rosenthal.  To establish liability based
on conspiracy, Rosenthal must show that O'Leary and Schaezler concurred in a
scheme to defame her with knowledge of the conspiracy's unlawful purpose.
(Wilcox v. Superior Court, supra, 27 Cal.App.4th at p. 828.)  Although the
requisite concurrence and knowledge may be inferred from the circumstances
(including the nature of the acts done, the relation of the parties and the
interests of the alleged conspirators), a reasonable inference may not be based
on suspicion, speculation or conjecture.  (Ibid.)

        As would be expected, there is no direct evidence in the record of a
conspiracy involving O'Leary and Schaezler and/or Reiter to defame Rosenthal.
Rather, Rosenthal relies in part on the fact that Schaezler knew O'Leary's
identity, which she had "an oath" not to reveal, and that each of them, and
others, were actively and vociferously critical of her and her positions.
However, that O'Leary and Schaezler knew each other and shared similar opinions
does not support a reasonable inference that they were acting collectively to
defame Rosenthal or destroy her credibility.
 

        Rosenthal asserts that O'Leary and Schaezler worked "hand-in-hand," parroted
each other's false statements about her and used decoys or shills (most
particularly Reiter) to secretly spread their negative sentiments.  She also
contends that the existence of a conspiracy is supported by the fact that
another McGhan employee had "infiltrated" her newsgroup using an alias, to
obtain personal information from unsuspecting members of the newsgroup.
However, Rosenthal did not proffer any competent, admissible evidence to
substantiate the foregoing and thus these contentions do not help her to
establish a prima facie showing of conspiracy.  (Wilcox v. Superior Court,
supra, 27 Cal.App.4th at p. 830.)

        Rosenthal also points to evidence that, after O'Leary's identity was revealed,
Schaezler defended him and falsely reported on the forum that O'Leary left the
breast implant manufacturing industry because he did not agree with how women
with breast implants were being treated.  However, it is purely speculative
that Schaezler's defense of O'Leary in this context indicates the existence of
a conspiracy between them.  (Wilcox v. Superior Court, supra, 27 Cal.App.4th at
p. 828.)

        Rosenthal has not submitted evidence to support the existence a prima facie
showing of a conspiracy between O'Leary and Schaezler or Reiter.  Thus, we need
not reach the issue of whether the alleged statements made by Schaezler and/or
Reiter were defamatory.

2. Conclusion

The record before us does not set forth a prima facie showing that Rosenthal
has a reasonable probability of prevailing on the merits of her
defamation-based claims.  Thus, O'Leary was entitled, as a matter of right, to
recover his attorney fees pursuant to section 425.16, subdivision (c) and we
must reverse the order denying his motion for such fees.  As Rosenthal did not
assert any challenge to the reasonableness of the fees requested, further
proceedings are not necessary.

DISPOSITION

        The order of the superior court denying O'Leary's request for attorney fees is
reversed.  The matter is remanded with directions that the superior court enter
a new order granting O'Leary's motion for attorney fees and costs in the amount
of $8,370.50
 

WE CONCUR:

HALLER, Acting P.J.
O'ROURKE, J.
McINTYRE, J.

Filed Jun 01 2001
Stephen M. Kelly, Clerk
Court of Appeal Fourth District