Developments of Interest

New Cases of Interest - July 12, 2012

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Summit Bank v. Rogers (2012) 206 Cal.App.4th 669.  This case involves Summit Bank, headquartered in Oakland, its Board Chair, Shirley  Nelson, and a former bank officer, Robert Rogers.  Rogers posted on Craigslist a number of critical comments concerning both Summit Bank and its management, resulting in an action filed by the Bank against Rogers once the Bank determined that it was Rogers who had posted the statements on Craigslist.  The Bank contended both that the statements were defamatory and that the false statements about the Bank violated provisions of the California Financial Code, which imposes liability when an untrue statement or rumor is made which is directly or by inference derogatory as to a bank's financial condition.  Rogers filed a SLAPP motion in connection with the complaint.

The court granted Rogers' motion, reversing the trial court, and also awarded Rogers' attorney's fees and costs.  The court held that Rogers' comments were not illegal as a matter of law under the Financial Code, and thus were within the scope of the SLAPP statute.  The court also found that Financial Code §1327 is facially unconstitutional under the First Amendment because it allows for criminal liability without a requirement of actual malice, is vague and overbroad, and is not sufficiently tailored to achieve its goal of preventing bank panics.  Rogers' statements also qualified as protected activity under the SLAPP statute because they were made in a public forum and addressed the financial stability of the banking system, a topic of considerable public interest.  The Bank further failed to establish a probability of prevailing on its claim because the employee's statements were characterized by the court as being true factual assertions combined with statements of opinion.  The message board on which they were posted was also one in which the average reader would expect to find "rants and exaggerations" rather than objective facts.

City of Colton v. Singletary (2012) 206 Cal.App.4th 751.  This is another SLAPP case in which a developer brought a SLAPP motion with respect to a city's causes of action for unfair business practices and injunctive relief.  The developer had pled guilty to bribing a member of the city council in order to obtain the city's agreement to construct infrastructure for a subdivision, resulting in the litigation initiated by the city.  The court of appeal confirmed grants of the the anti-SLAPP motion with respect to the lawsuit but reversed the grant of the anti-SLAPP motion as it pertained to bribery.  The court determined that the city's causes of action arose from the developer's lawsuit which is protected activity within the litigation privilege of Civil Code §47 which was absolute and the city was unlikely to prevail on its contentions that the filing of the lawsuit was improper.

Healdsburg Citizens for Sustainable Solutions v. City of Healdsburg (2012) 206 Cal.App.4th 988.  In this case an environmental organization and two individuals prevailed in a mandamus petition challenging a certification of an environmental impact report and approval of a development project by the City of Healdsburg.  The attorney's fees included work that had been performed by an attorney who was a member of the organization bringing the action and also an individual petitioner.  The attorney's fees were awarded under the Private Attorney General Doctrine, CCP §1021.5.

The Court of Appeal upheld the trial court's decision, finding that an attorney who is a member of an organization can recover fees for work performed while representing the organization if the attorney meets the requirements of the Private Attorney General Doctrine.  Here, the trial court could have reasonably concluded that with multiple attorneys in the action, each attorney had an attorney-client relationship with the organization, as well as with the other individual petitioner, and the organization itself was large enough so that there was no cause for concern that the attorney who was also a member of the organization might be self-dealing.  The individual's attorney's status as also being a petitioner in the action did not preclude an award of attorney's fees.

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