Simpson sued for defamation and related claims against Gore and his law firm over a newspaper ad directed to owners of wood decks constructed after January 1, 2004. The ad advised readers that “you may have certain legal rights and be entitled to monetary compensation, and repair or replacement of your deck” if the deck was built with galvanized screws manufactured by Simpson or other specified entities. It suggested that such people contact Gore “if you would like an attorney to investigate whether you have a potential claim.”
Gore successfully moved to have the complaint stricken under the anti-SLAPP statute, the court of appeals affirmed, and so did the California Supreme Court. The key issue was whether Simpson’s complaint was exempt from the anti-SLAPP statute because of section 425.17(c), which excludes causes of action arising from representations of fact about the speaker’s or a competitor’s “business operations, goods, or services ... made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person’s goods or services” or “made in the course of delivering the person’s goods or services.”
Galvanized screws such as Simpson sells are known to be vulnerable to corrosion from the pressure-treated wood commonly used in outdoor decks, shortening their service life and compromising their ability to support their recommended loads and endure stress. The problem worsened when, in 2004, the EPA recommended the end of sales of lumber treated with chromium copper arsenate; the alternatives are more corrosive. Simpson stated that it communicated this potential problem to the industry and the public.
Gore learned about the corrosion potential and contacted a senior inspector with the Contra Costa County DA’s Office, which ultimately issued a consumer alert warning about corrosion. “The alert noted that advisories had been posted in some retail stores about the potential incompatibility of the two products but cautioned that the advisories ‘tend to be in very small print or somewhat inconspicuously posted.’” Gore also visited Simpson’s website, which included a bold-type advisory that “[m]any of the new Pressure Treated Woods use chemicals that are corrosive to steel. By selecting connectors that offer greater corrosion resistance ... you can extend the service life of your connectors. However, corrosion will still occur. You should perform periodic inspection of your connectors and fasteners to insure their strength is not being adversely affected by corrosion. In some cases, it may be necessary to have a local professional perform the inspections. Because of the many variables involved, Simpson Strong-Tie cannot provide estimates on service life of connectors, anchors or fasteners.”
Gore also found out about a Massachusetts class action complaint against one of Simpson’s competitors, and about investigations by Gore’s former law firm into claims that some newly designed fasteners were failing in spite of manufacturers’ representations that “special coatings” would resist corrosion. As a result, Gore placed the ad, allegedly modeled after notices he or his cocounsel had used in connection with other class actions. Simpson conducted a survey revealing that shoppers who read the ad “were significantly more likely to believe that Simpson’s galvanized screws were defective or of low quality and were significantly less likely to purchase galvanized screws manufactured by Simpson.”
The court began by stating that section 425.17(c) should be narrowly construed; its intent was to “trim off a few bad branches.” Simpson, as plaintiff, bore the burden of establishing that Gore’s ad fell within the commercial speech exemption. (Not clear that the placement of the burden matters here, though.)
Interpreting the exemption, the court ruled that the statute exempts a cause of action arising from a statement or conduct that (1) consists of representations of fact about the speaker’s or a competitor’s business operations, goods, or services (2) that were made either (a) “for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services” or (b) “in the course of delivering the [speaker’s] goods or services.”
The court rejected a construction that would have exempted a cause of action for any statements/conduct in the course of delivering goods/services, not just representations of fact about oneself/a competitor. While as grammatically correct as the court’s favored interpretation, this alternative seemed overbroad and inconsistent with the legislative purpose and history. (Compare what counts as offering a service in commerce for purposes of the Lanham Act: in some views, pretty much everything, meaning that the exemption would apply in too many cases, for example statements by a nonprofit in the course of delivering its advocacy services.) The court didn’t think the stage of the transaction (ad versus delivery) should play such a critical factor in applying the exemption. Moreover, the court didn’t think it made sense for a business to lack anti-SLAPP protection for political or religious statements made by an employee in the course of delivering a product or service, but not for the same statements made for the purpose of selling its products.
The only remaining question was whether the causes of action here “aris[e] from ... representations of fact about [Gore’s] ... business operations, goods, or services.” The court found that they didn’t. The defamation and related claims were about the ad’s alleged message that Simpson’s galvanized screws are defective. Assuming this is true, this is not “about” Gore’s or a competitor’s “business operations, goods, or services.” It is “about” Simpson’s products.
Simpson argued that the statement that an attorney will “investigate whether you have a potential claim” is about Gore’s services, and also that the ad justified the inference “that Gore has investigated the named companies and has discovered that they are selling defective screws.” Both of these statements are “about” Gore’s business operations, but Simpson’s causes of action didn’t arise from them as required for the exemption to apply. Simpson didn’t allege that the statement that an attorney would investigate was false or even defamatory, plus it’s not a representation of fact because it’s a promise to take certain future actions (this last bit, tacked on, seems rather sloppy and vulnerable to misreading). As for the allegedly implied investigation, “it would be no more than an attempt to layer the allegedly defamatory inference itself--i.e., that Simpson’s galvanized screws are defective--with an alleged inference that Gore had discovered the defect.” This wordplay could not justify expanding the scope of the exemption, which is supposed to be narrow.
Moreover, Simpson’s alleged damages didn’t come from any implied representation that Gore allegedly discovered that Simpson’s products were defective, but because Gore allegedly implied they were defective. As the court of appeals put it, “To the extent that Gore’s advertisement ‘consists of’ representations about his services, Simpson’s action does not ‘aris[e] from’ it; to the extent that Simpson's action ‘aris[es] from’ a representation by Gore, the representation was not ‘about’ Gore’s or a competitor’s services or business operations.” It would be possible, the court noted, for a cause of action to arise based on representations about the attorney’s own services, such as “a false claim that the attorney had already recovered a judgment against the manufacturer for the defective product,” but that’s not what we have here.
Simpson argued that the ad defamed Simpson in order to tout Gore, thus making the self-promotion inseparably linked with the defamation. “But this is merely another way of saying that the speaker made a representation of fact about a noncompetitor’s goods for the purpose of promoting the speaker’s own services.” The legislature could have written the exemption to cover this, but it didn’t. It is true that a party can’t avoid the commercial speech exception by parsing an ad into component parts: the proper test turns on the basis for the cause of action. But here, the cause of action is based on something that does not involve representations of facts about Gore or Gore’s competitors. The court declined to adopt a construction that would take anti-SLAPP protection away from a press release critical of a political candidate if the press release also mentioned the products sold by the business-speaker.
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