Good Ruling In California Protects Anonymity Of Online Critics — Even When The Information Was False

Defamation

from the anonymity-is-important dept

Over and over again we’ve seen people try to interpret anything someone says about them that they don’t like as defamatory. But just because you don’t like what’s said, that doesn’t make it defamatory — and that can also apply even if the statements actually were false.

We’ve written a lot in the past about the importance of protecting anonymous speech online, so it’s good to see a good ruling in California protecting the anonymity of an online critic (found via Eriq Gardner’s story at The Hollywood Reporter). The story involves an anonymous email that was sent to a Sony exec and a producer working on the movie Goosebumps, raising some issues about a visual effects company, named Vitality, doing work on the film. There’s a lot of background here that can get confusing so I’ll try to detail it here as simply as possible:

1. A few years ago, a special effects house named Hydraulx did visual effect work on a Sony Pictures film, Battle: Los Angeles.
2. At the same time, Hydraulx was producing an entirely separate (non-Sony) film Skyline that had some similar plot points (aliens invade LA).
3. There was a fairly public dispute in which Sony accused Hydraulx of a variety of things stemming from this apparent conflict of interest. Eventually that dispute was settled.
4. Sony and the producers of Goosebumps hired a visual effects company named Vitality to work on the effects in that movie.

There’s some more in there, but that should cover the key establishing facts. This lawsuit was against an anonymous person who sent an email to Sony and a producer of Goosebumps suggesting Vitality is actually the same company as Hydraulx and expressing surprise that Sony would work with them again after the earlier dispute — and also wondering if perhaps Vitality had hidden the Hydraulx connection in getting the job. Here’s the email:

I hoped I might whistle-blow on Vitality Visual Effects and Hydraulx. I was surprised to see ?Goosebumps? on Vitalitys [sic] IMDB as Vitality is co-owned by Greg and Colin Strause of Hydraulx and I thought neither you nor Sony had a good relationship with the Brothers after Skyline/Battle L.A.

Vitality and Hydraulx share owners (Greg & Colin), their Exec Guy Botham works for both companies – Vitality and Hydraulx even share L.A. and Vancouver offices, hardware, and infrastructure.

If Vitality misinformed you or Sony as to its ownership or profit participants in any way, please take my email into consideration.

I am a concerned vfx professional whom, myself, has been burned by Greg and Colin and I do not like people perpetuating what I consider bad business practices.

Thank you for your time in reading. I hope this email helps.

Regards,
A concerned VFX recruit.

Separately, Hydraulx and the Strauses were already engaged in a defamation lawsuit against some anonymous critics who had sent emails to a movie studio that Hydraulx was working with, claiming that the company was on the verge of financial collapse. Perhaps thinking this new email was from the same, or a related, individual Hydraulx added this person “Doe 2” to that lawsuit and went about trying to discover who it was. Doe 2 filed an anti-SLAPP claim under California’s (pretty good) anti-SLAPP law.

A state trial court recognizing (correctly) that you can’t reveal anonymous speakers without showing a prima facie case of defamation looked at the various statements in the email and determined that they were enough to show defamation — and then ordered discovery to go forward to identify Doe 2. To establish the defamation case, there were statements from the various people behind Hydraulx and Vitality insisting that the Strause brothers had no ownership at all in Vitality (there are separate statements in the ruling suggesting that Hydraulx had sold its old equipment to Vitality, but it’s never addressed if that’s true or not) On appeal, the appeals court has rejected that pretty soundly, noting that a variety of points. But, most importantly, it finds that even though the statement about the same ownership may be false, that isn’t enough to reveal an anonymous speaker.

The key to rejecting the defamation claim: most of the statements aren’t actually about Hydraulx, but Vitality. On top of that, all of the statements can be seen as either statements of opinion or simply not defamatory at all. There’s a big discussion on whether or not the use of the word “whistle-blow” implied some sort of criminal activity on the part of Hydraulx, but the court says it does not:

The trial court expressed a concern that ?in the language of the law,? ?whistleblower? implied Hydraulx engaged in criminal or wrongful conduct: ?People don?t whistle-blow fun, nice things that are meaningless. People whistle-blow wrongdoing. . . . And the word whistle-blow . . . causes me to read it in a different light.? While we agree that, in the context of litigation, the term ?whistle-blow? can imply an allegation of criminal or wrongful conduct, we must consider the word in the context of Doe 2?s emails and measure its use ?not so much by its effect when subjected to the critical analysis of a mind trained in the law, but by the natural and probable effect upon the mind of [the] reader.?…

The specific wording of the emails, and the order in which the information is communicated, are instructive. Doe 2 opened his emails with cautionary language, saying, ?I hoped I might whistle-blow on Vitality Visual Effects and Hydraulx.?… The words ?hoped? and ?might? before ?whistle-blow? signal that Doe 2 is using the term hyperbolically to introduce a communication of specific information that the recipients may not know. In context, the term explains why he is writing and introduces the information about Vitality and Hydraulx?s supposed shared ownership, which, in and of itself, is not defamatory.

The court also notes that just because the common ownership of the two companies, even while false, is not defamatory:

Although Greg Strause?s and Bothman?s declarations were sufficient to make a prima facie showing of falsehood with respect to the statements associating Hydraulx with Vitality, the allegation of common ownership is not defamatory on its face and Hydraulx has not offered any extrinsic facts supporting a defamatory innuendo. To the contrary, because Hydraulx?s complaint and declarations portray both companies in a positive light, there is no indication that the inaccurate attribution of common ownership was defamatory.

On top of that throughout the email, it’s pretty clear that the individual is sharing information that he felt that producers/studio might not know, rather than making defamatory claims. Specifically, the emailer wasn’t making new claims that were defamatory but calling attention to previously known information:

Hydraulx argues that Doe 2?s offer to ?whistle-blow? and references to ?bad business practices? and being ?burned? imply a defamatory accusation Hydraulx engaged in dishonesty or wrongful conduct beyond the conflicts of interest addressed in the emails. We find that in context, the term ?whistle-blow? was used hyperbolically to introduce the disclosed and non-defamatory allegation of common ownership and that Doe 2?s reference to ?bad business practices? reasonably referred to the known or disclosed facts: Hydraulx?s Skyline conflict of interest and Vitality?s potential conflict if it failed to disclose common ownership. In context, the only reasonable interpretation of ?bad business practices? is in reference to facts known to the recipients of the emails (Hydraulx?s prior conflict of interest) and facts disclosed in the emails (the false allegation of common ownership and Vitality?s potential conflict of interest involving Goosebumps .)

Got that? Because the only bad behavior the emailer was referencing by Hydraulx was the already known dispute — and the only false claim wasn’t defamatory, there’s no defamation here. Hydraulx isn’t claiming that the original stories of conflict of interest around Skyline/Battle:LA are defamatory (because it probably can’t), so it can’t really say this is defamatory here.

Also hurting the defamation case — the emailed discussions among the folks working on Goosebumps in response to these emails was basically that they didn’t even believe it in the first place.

The court also finds that the phrase “bad business practices” is so broad and vague that it also cannot be found to be defamatory:

The same is true in this case because behavior one person regards as a ?bad business practice? may be acceptable to another person and conduct causing one person to feel ?burned? may not affect another person at all. Someone might regard something as trivial as failures to return telephone calls as ?bad business practices.? Another person might use ?bad business practices? to describe fraudulent or unlawful conduct. Similarly, a person might feel ?burned? by any range of behavior, from a social snub to a fraudulent transaction. Without some reference to the type of undisclosed misconduct, e.g., ?In my opinion, John Jones is a liar,? these comments are too vague and uncertain to be actionable as conveying a defamatory accusation.

This is potentially an important ruling on a number of different levels. Sometimes we get so caught up in the “true/false” dichotomy that we don’t step back and look at the bigger picture. Indeed, my first impression on reading through the ruling was that the email might, in fact, be defamatory because of the false claims of ownership in Vitality. It was only after walking through the court’s careful reasoning that I realized that the court is right here. Just because that claim is false, that doesn’t automatically make it defamatory. Defamatory speech needs to not just be false, but false and injure someone’s reputation. In this case, the email was clearly trying to portray Vitality in a bad light (and, to a lesser extent, Hydraulx), but the statements making them look bad were either based on factual claims or statements of opinion. The only statement deemed as false didn’t harm Hydraulx’s reputation at all.

It’s good to see the court take the time to carefully parse the email this way and break it out. This will provide more protections for anonymous online critics in the future as well.

Filed Under: anonymity, california, critics, defamation
Companies: hydraulx, sony pictures, vitality