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Summit Bank v. Robert Rogers

May 29, 2012


Trial Court: Alameda County Superior Court Trial Judge: Hon. Frank Roesch (Alameda County Super. Ct. No. RG-09-468837)

The opinion of the court was delivered by: Ruvolo, P. J.




Summit Bank (the Bank) sued its former employee Robert Rogers (Rogers) for posting allegedly defamatory messages on a section of the Internet Web site (Craigslist) entitled "Rants and Raves." The Bank alleged that Rogers, "under the guise of anonymity, made false and libelous statements about [the Bank's] operations, the integrity of its chief executive officer [(CEO)] and founder, the safety of depositors' funds and made false statements about audits and regulatory actions." Rogers moved to strike the Bank's complaint pursuant to Code of Civil Procedure section 425.16,*fn1 California's "anti-SLAPP" statute, on the ground that the suit was brought for the illegitimate purpose of chilling Rogers's right to speak freely about the Bank.*fn2 Rogers's appeal is from the trial court's order denying his motion to strike after finding: (1) the statements made were not protected speech within the meaning of the anti-SLAPP law (§ 425.16, subd. (b)(1)), and (2) the Bank had shown a probability of success on the merits of its defamation claim.

We conclude that the trial court erred in both findings. In so holding, we reject the Bank's threshold argument that Rogers was precluded from using the anti-SLAPP law to strike the Bank's action because Rogers's "underlying conduct was illegal as a matter of law" and thus "falls outside protected speech and petition rights." (Flatley v. Mauro (2006) 39 Cal.4th 299, 320, 324 (Flatley).) Specifically, the Bank claims Rogers's posts on Craigslist 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. We find 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. (Flatley, supra, 39 Cal.4th at p. 320; U.S. Const., 1st Amend.; Cal. Const., art. I, § 2.) Therefore, the anti-SLAPP statute applies to the Bank's defamation action against Rogers.

We further find 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 in connection with "an issue of public interest" (§ 425.16, subd. (e)(3)). Because the Bank failed to satisfy its burden of showing a probability of success on the merits, Rogers's anti-SLAPP motion should have been granted. Consequently, we reverse and remand for further proceedings.



The Bank, which describes itself as a "community bank headquartered in Oakland, California," commenced this action on August 17, 2009, by filing a complaint against unknown Doe defendants.*fn3 Among other things, the complaint alleged a cause of action for defamation, contending that "[b]eginning in about May 2009, and continuing at various times thereafter" Doe defendants published false statements about the Bank with the intent to defame the Bank's "good name and reputation." The Bank eventually learned Rogers's identity as the person who published the alleged defamatory statements after the court granted the Bank's request to serve a subpoena on Craigslist. Rogers was formerly employed by the Bank as its vice-president and chief credit administrator from September 2007 until September 2008, when he resigned.

The operative complaint for our purposes is the Bank's second amended complaint (SAC) filed against Rogers on October 8, 2010. The SAC alleges a single cause of action for defamation based on Internet posts in the "Rants and Raves" section of Craigslist starting in or about May 2009 and ending about July 2009. Each post was retained for public view for seven days, after which the posts were automatically deleted by Craigslist. While it is claimed Rogers posted 21 derogatory comments in a two-month period, the Bank contended "[a]t least five of Rogers's posts included defamatory statements . . . ." (Fn. omitted.) The alleged defamatory posts read as follows:

The June 7, 2009 post: "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."

The June 21, 2009 post: "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."

The July 14, 2009 post: "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 July 25, 2009 post: "I had banked at Summit Banks [sic] Hayward Office. Service was poor and Summit Bank closed this office. Whats [sic] up with that. [¶] All the customer [sic] were left high and dry. This is a piss poor Bank. I would suggest that anyone that banks at Summit Bank leave before they close."

The second July 25, 2009 post: "Move your accounts now before its [sic] too late."

Although the posted messages were anonymous, with the poster being identified by a pseudonym, Rogers admitted that he posted each of these messages. However, it was Rogers's position that he "had the right under the First Amendment to express these opinions, especially in the context in which he expressed them, where it was clear that these were/are his opinions and not facts."

On July 6, 2010, Rogers filed an anti-SLAPP motion under section 425.16 to strike the Bank's complaint. Rogers asserted that the Bank's complaint fell within the ambit of the anti-SLAPP statute because the messages he posted on Craigslist were acts in furtherance of his constitutionally protected right to free speech "in connection with a public issue" or "an issue of public interest" (§ 425.16, subd. (e)(3)). He additionally claimed that the Bank could not establish a probability of prevailing on its defamation action because the bulk of the posts constituted Rogers's opinions, and the facts that were set forth in the posts were true.

In its opposition, the Bank argued that the posted statements constituted unprotected speech because "making false claims against a bank is criminal." In making this argument, the Bank invoked former Financial Code section 756, reenacted verbatim and renumbered as Financial Code section 1327,*fn4 which imposes criminal liability when an untrue statement or rumor is made which is directly or by inference derogatory to a bank's financial condition. Additionally, the Bank claimed that Rogers's Craigslist posts did not concern an issue of public interest. The Bank also asserted that it would prevail on its claim for defamation.

On September 10, 2010, after hearing argument, the trial court denied Rogers's motion to strike the Bank's complaint. In its written order, the trial court determined: (1) Rogers "has not sustained his burden to show that the conduct falls within the provisions of . . . section 425.16[, subdivision] (b)(1) because the conduct did not arise from an act in furtherance of any protected constitutional activity," and (2) the Bank has "demonstrated that it has established a probability that it will prevail on the claim." This appeal followed.*fn5



A. Standard of Review

A two-step process is followed in determining the outcome of a special motion to strike pursuant to section 425.16. " 'First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. (§ 425.16, subd. (b)(1).) "A defendant meets this burden by demonstrating that the act underlying the plaintiff's cause fits one of the categories spelled out in section 425.16, subdivision (e)" [citation]. If the court finds that such a showing has been made, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim. (§ 425.16, subd. (b)(1) . . . .)' [Citations.] 'Only a cause of action that satisfies both prongs of the anti-SLAPP statute--i.e., that arises from protected speech or petitioning and lacks even minimal merit--is a SLAPP, subject to being stricken under the statute.' [Citation.]" (Thomas v. Quintero (2005) 126 Cal.App.4th 635, 645.)

Where a defendant brings a special motion to strike based on a claim that the plaintiff's action arises from activity in furtherance of the defendant's exercise of protected speech or petition rights, but the supposedly protected speech or petition activity was illegal as a matter of law, the defendant is precluded from using the anti-SLAPP statute to strike the plaintiff's action. (Flatley, supra, 39 Cal.4th at p. 320.) If a factual dispute exists about the lawfulness of the defendant's conduct, it cannot be resolved within the first prong, but must be raised by the plaintiff in connection with the plaintiff's burden to show a probability of prevailing on the merits (the second prong). (Ibid.)

Appellate review of a trial court's ruling on an anti-SLAPP motion is de novo. (United States Fire Ins. Co. v. Sheppard, Mullin, Richter & Hampton LLP (2009) 171 Cal.App.4th 1617, 1625.) "Thus, [appellate] review is conducted in the same manner as the trial court in considering an anti-SLAPP motion." (Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1016.)

B. The Bank hasFailed to Establish that Rogers's Speech was Illegal As a Matter of Law

The Bank has vigorously and consistently claimed throughout this litigation that Rogers cannot invoke anti-SLAPP protection because his posts on Craigslist fall within an exception to the anti-SLAPP statute for speech that is illegal as a matter of law. (See Flatley, supra, 39 Cal.4th at p. 320.) Specifically, the Bank has argued that its claim against Rogers for defamation "is based on conduct by Rogers which constitutes a violation of Financial Code section 756 [currently Financial Code section 1327] and thus is ...

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