Monday, November 1, 2004
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Anti-SLAPP Law Applied to Suit Against DIRECTV by ‘Pirates’
Extortion Claim by Users of Allegedly Illegal Devices Not Made in ‘Public Interest,’ Justices Say
By Kenneth Ofgang, Staff Writer/Appellate Courts
The anti-SLAPP statute applies to a suit against DIRECTV by individuals who claim they were subjected to extortion when the company threatened to sue them for misappropriating its signals, this district’s Court of Appeal ruled Friday.
The “hackers” and “pirates,” as the company describes those who use specialized equipment to receive DIRECTV satellite service without paying for it, were not acting in the public interest by suing the company under the unfair competition law, Justice Richard Aldrich wrote for Div. Three.
DIRECTV’s campaign against piracy has included obtaining writs of seizure authorizing authorities to seize and impound products and business records from makers and distributors of equipment used to unscramble its transmissions.
The seizure of those records has enabled the company to identify thousands of individuals who have purchased the equipment, who in turn have been sent letters threatening them with lawsuits unless they turn in the devices and pay compensation to DIRECTV for having used them. The letters cited various cases in which DIRECTV said it prevailed against other users of the devices.
Extortion Claim
In their complaint, the plaintiffs in the Los Angeles Superior Court action claim that the letters constitute defamation, violation of the civil right to be free from personal insult and defamation under Civil Code Sec. 52.1, and extortion and duress.
In its anti-SLAPP motion, DIRECTV argued that the suit infringed upon its constitutional right to petition for redress of grievances, and also asserted that it would probably prevail on the merits, since the letters’ contents were protected by the litigation privilege as set forth in Civil Code Sec. 47(b).
The plaintiffs responded that they expected to prevail on the merits, arguing that not all of the devices were illegal, the records seized did not establish that the devices were being used illegally, many of the letters were sent after the statute of limitations had run, and DIRECTV had yet to prevail, other than by default judgment, in any of the lawsuits referenced in its letters.
Los Angeles Superior Court Judge Charles McCoy granted the anti-SLAPP motion, saying the company had a constitutional right to send the letters. The judge agreed with DIRECTV that the letters were absolutely privileged, finding that they send in good faith contemplation of litigation and noting that the company had, in fact, filed more than 600 lawsuits.
Fee Award
DIRECTV also was awarded more than $97,000 in attorney fees.
On appeal, the plaintiffs argued that the amendment to the anti-SLAPP law enacted last year, prohibiting application of the statute to public interest lawsuits, applied. DIRECTV argued that even if this was a public-interest suit, the amendment could not be applied to a case that was already pending when it took effect.
In a footnote, Aldrich noted that the latter argument has been rejected in several Court of Appeal decisions, so that “it is now settled” that the amendment is applied retroactively.
Addressing the merits, however, the justice said the new public-interest exception does not apply because a ruling in favor of the plaintiffs would not “enforce an important right affect the public interest,” nor could the plaintiffs show that “[p]rivate enforcement is necessary and places a disproportionate financial burden on the plaintiff in relation to the plaintiff’s stake in the matter,” both of which must be established under the terms of the statute.
“Because this lawsuit is not designed to confer a benefit upon anyone other than plaintiffs, it is only motivated by personal gain,” Aldrich wrote.
“We are unconvinced by plaintiffs’ portrayal of themselves as the public-interest David against the corporate Goliath,” the justice added.
Suit Held SLAPP
Aldrich went on to agree with the trial judge that DIRECTV would probably prevail on the merits of the suit and had thus satisfied the requirements of the anti-SLAPP law.
In an unpublished portion of the opinion, Aldrich said the attorney fee award was not excessive.
He noted that the company had scaled down its original request from $160,000 to $128,000 after the trial judge questioned how its lawyers could have spent 130 hours on a 10-page reply to the opposition to its motion, and that the award was only 60 percent of the revised request.
The case is Blanchard v. DIRECTV, Inc., B168901.
Copyright 2004, Metropolitan News Company