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Doe v. Superior Court (Avongard Products U.S.A. Ltd.)

California Court of Appeals, Second District, Third Division

August 2, 2016

JOHN DOE 2, Petitioner,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent AVONGARD PRODUCTS U.S.A. LTD., Real Party in Interest.

         PETITION for writ of mandate. Terry A. Green, Judge. Petition granted. Los Angeles County Super. Ct. No. BC575833

          Gerard Fox Law and Morgan E. Pietz for Petitioner.

          No appearance for Respondent.

          Greenberg Glusker Fields Claman & Machtinger, Bonnie E. Eskenazi, Jonathan B. Sokol and Elizabeth Sbardellati for Real Party in Interest.

          HOGUE, J. [*]

         Avongard Products U.S.A. Ltd., doing business as Hydraulx (Hydraulx), a preeminent film industry visual special effects (vfx) provider, sued petitioner John Doe 2 (Doe 2) for libel, alleging Doe 2’s anonymous emails to a film producer and a film industry executive harmed its reputation. After Doe 2 filed a special motion to strike under California’s anti-SLAPP statute, Code of Civil Procedure section 425.16, the trial court granted Hydraulx’s request to conduct special discovery that would reveal Doe 2’s identity.[1] Doe 2 filed a petition for writ of mandate seeking reversal of the discovery order.

         We grant the petition. Under Krinsky v. Doe 6 (2008) 159 Cal.App.4th 1154 (Krinsky), First Amendment protection for anonymous speech requires a libel plaintiff seeking to discover an anonymous libel defendant’s identity to make a prima facie showing of all elements of defamation. Paterno v. Superior Court (2008) 163 Cal.App.4th 1342 (Paterno) similarly holds that a libel plaintiff cannot establish good cause for special discovery under section 426.16, subdivision (g) without a prima facie showing the allegedly libelous statements are false and unprivileged.

         Hydraulx failed to make a prima facie showing that Doe 2’s emails are provably false and defamatory statements of fact or that the emails caused Hydraulx to suffer actual damage. We therefore issue a writ of mandate ordering the trial court to vacate its discovery order and issue a new order denying Hydraulx’s special discovery motion.

         FACTUAL BACKGROUND

         Hydraulx is a leading visual effects designer that provided visual effects services for successful feature films such as The Avengers and Terminator 3; advertising for large corporations such as Coca-Cola, Inc. and Ford Motor Company; and music videos for famous pop and rock music stars including Jennifer Lopez, Britney Spears, Usher, Aerosmith and U2, among others.

         In 2010, Hydraulx was embroiled in a highly publicized dispute with Sony Pictures (Sony), arising out of Hydraulx’s alleged conflict of interest in producing the motion picture Skyline, while simultaneously providing vfx services for Sony’s film, Battle: Los Angeles. Both Skyline and Battle: Los Angeles involved a similar theme-an alien invasion of Los Angeles-and Hydraulx’s scheduled release of Skyline in November 2010-just a few months before Sony released Battle: Los Angeles in March 2011-led to accusations by Sony that Hydraulx had used Sony’s equipment and resources to produce the movie in violation of the companies’ vfx agreement. After Sony sued Hydraulx in arbitration, news articles reported Sony’s contention that “Hydraulx concealed the competitive nature of their project [Skyline].” Sony dropped the arbitration shortly after releasing Battle: Los Angeles in March 2011, reportedly “ ‘satisfied its special effects were not used’ ” in Skyline.

         Doe 2 is an anonymous individual who sent two substantially identical emails to business associates of Hydraulx in August 2015. The emails were sent from Google Inc.’s web-based email service, Gmail, and identified the sender as “Greg Baktor” with the email address “vfx.recruits@gmail.com.” Doe 2 sent one email to Lori Furie, an executive at Sony involved in Sony’s movie project Goosebumps, and the other to Neil Moritz, a producer who worked on Goosebumps and Sony’s earlier production, Battle: Los Angeles.[2] The email to Moritz read:

         “I hoped I might whistle-blow on Vitality Visual Effects and Hydraulx. I was surprised to see ‘Goosebumps’ on Vitalitys [sic] IMDB[3] as Vitality is co-owned by Greg and Colin Strause of Hydraulx and I thought neither you nor Sony had[4] 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.”

         Moritz forwarded the email to a Hydraulx client, visual effects producer Greg Baxter, who worked with Furie and Moritz on the Goosebumps film. Baxter responded:

         “Not sure this is true. [¶] As I understand it, Guy [Botham] bought the hardware and software from (now defunct) Hydraulx. [¶] Strause Brothers, I was told, have zero involvement in Vitality, other than selling Guy their equipment and pipeline. [¶] I’ll confirm with Guy.”

         Baxter forwarded the email to Guy Botham, Vitality’s CEO, and Greg Strause, who co-owns Hydraulx with his brother, Colin Strause.

         PROCEDURAL HISTORY

         1. Hydraulx’s Complaint for Defamation

         When Doe 2 sent the emails at issue in this writ petition, Hydraulx was already engaged in a law suit for defamation against several other anonymous individuals, fictitiously named in its March 2015 complaint as Does 1 through 10. The complaint alleged that Doe 1, “with the material assistance of Does 2 through 10, ” used a pseudonym and a private email account “to send a November 7, 2014 email to the motion picture studio with which Hydraulx is presently engaged” describing Hydraulx as “ ‘on the verge of financial collapse.’ ” The email asserted Hydraulx was “ ‘running on life support with a skeleton crew, ’ ” while it “ ‘missed payroll’ ” and had its “ ‘resources consumed by many personal expenditures and various independent film projects.’ ”

         Several months after Hydraulx filed suit, Doe 2 sent his August 2015 emails to Furie and Moritz. Based on those emails, Hydraulx amended its complaint to add allegations against Doe 2.

         Doe 2 filed a special motion to strike the complaint under the anti-SLAPP statute, section 425.16.[5] Hydraulx responded by filing a special discovery motion under section 425.16, subdivision (g) seeking to discover Doe 2’s identity by taking his deposition and enforcing a subpoena directed to Google, Inc., the operator of Doe 2’s Gmail account.[6]

         2. Hydraulx’s Special Discovery Motion

         Relying on the Paterno court’s holding that a prima facie showing of libel is sufficient to entitle a plaintiff to special discovery under the anti-SLAPP statute (see Paterno, supra, 163 Cal.App.4th at p. 1349), Hydraulx sought to demonstrate Doe 2’s statements were provably false by submitting declarations from Greg Strause and Guy Botham attesting to the independent ownership of Hydraulx and Vitality. Addressing Doe 2’s statement, “Vitality is co-owned by Greg and Colin Strause of Hydraulx, ” Greg Strause declared, “Hydraulx does not now own and has never owned or controlled Vitality, a visual effects company owned and controlled by Guy Botham” and “neither I nor my brother... owns or has ever owned any interest in Vitality.” Botham identified himself as the “sole shareholder, owner and operator” of two entities using the name Vitality Visual Effects: Vitality Visual Effects, Inc., a California Corporation, and Vitality Visual Effects Ltd., a British Columbia corporation, referring to them collectively as Vitality. Botham further declared, “[n]either Greg Strause, Colin Strause nor Hydraulx own, or have ever owned, any interest in Vitality.”

         Hydraulx also sought to establish the statements were defamatory in nature by emphasizing the word “whistle-blow” in the emails, which Greg Strause declared had the effect of “insinuating that Hydraulx has done something dishonest and/or is hiding something, which it has not.” He also averred, “Hydraulx does not perpetuate bad business practices, but rather follows the industry standard, ” and ...


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