Metropolitan News-Enterprise


Tuesday, August 14, 2012


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Court of Appeal Rejects Lawsuit Against Tech Blog as SLAPP




An entrepreneur’s libel suit against a well-known technology blog was correctly tossed out under the anti-SLAPP law, the First District Court of Appeal has ruled.

Div. One Friday affirmed a San Francisco Superior Court judge’s order granting Gawker Media, LLC’s special motion to strike the suit by Scott Redmond, chief executive officer of Peep Wireless Telephony Company.

Redmond and Peep were the subjects of an irreverent article by John Herrman and Adrian Covert on Gawker’s Gizmodo blog in January of last year. The article, entitled “Smoke & Mirrors: The Greatest Scam in Tech,” held out Redmond and Peep as the quintessential example about how the annual Consumer Electronics Show is used to promote dubious products.

“In the tech world, a few questions are usually enough,” they wrote. “Does the product work? Is the idea good? How much does it cost? But as Peep Telephony reminds us, there’s a fourth, all-important qualification: Is it real?”

‘A Place to Get Lied to’

CES “is a place where you get lied to,” the authors commented. “A lot. Always, basically, which is one of the reasons reporters attending CES mope so melodramatically: for every cool thing you see, you have to endure hours of pitches, all of which are misleading, and many of which, disingenuously so.”

Citing Redmond’s websites and other online sources, Herrman and Covert discussed various concepts for which investor funding was sought but which Redmond had not brought to fruition. Redmond, they said, was the type of entrepreneur who “strings together a bunch of technical jargon that hardly informs what he’s doing, and presumably gets some kind of funding,” then forms companies that later “just disappear.”

They concluded:

“There’s no point in trying to ascribe motives to what Redmond does, and we don’t want to make this about character or intent.  Point is, these ventures rarely—if ever—work.  And through the harsh lens of hindsight, some look like they weren’t ever meant to.”

Response Published

Redmond contained the article was inaccurate, and submitted an email response that the blog published in full. But Gawker rejected a subsequent demand that the article, and his response, both of which drew voluminous reader comments, be removed from the Internet.

Redmond then filed suit, claiming he had been falsely accused of using non-functioning technology, exaggerating his technical qualifications, and defrauding investors. Gawker responded with an anti-SLAPP motion in which it argued that the article was protected speech with regard to a public issue; that it was a statement of the authors’ protected opinions;  that if treated as assertions of fact, the statements were substantially true; and that Redmond was a limited purpose public figure who could not prove the malice requisite to liability on a defamation claim.

The trial judge agreed with respect to the applicability of the anti-SLAPP statute, and that the statements were opinion and that the plaintiff was required, and failed, to prove malice.

Justice Sandra Margulies, in an unpublished opinion for the Court of Appeal, agreed.

‘Public Issue’

She rejected the plaintiff’s claim that because he was only at CES to solicit funds from a limited number of potential investors, his activities there did not relate to a “public issue.”

In fact, the ability or inability of his companies o produce marketable technology products had been the subject of much public discussion, a good deal of it generated by Redmond himself, the jurist noted.

“He actively promoted his product ideas in Internet media heavily trafficked by tech consumers and members of the tech community,” Margulies explained. “He sent out press releases, responded to inquiries by well-known tech writers, gave interviews, maintained Web sites with promotional videos, and sought to use the CES and the publicity surrounding it as a means to bring his company to the attention of the public and potential investors.  His own Web sites touted media interest in his ventures as a selling point.  Moreover, the Gizmodo article was disseminated in a public forum and concerned a public controversy.  At least four articles about Peep, as well as a widely followed Twitter message by a well-known tech analyst, had preceded the Gizmodo article.  Four of these had expressed open skepticism about Redmond’s technological claims, and significant reader response had been generated.”

The justice went on to say that the trial judge was correct in finding that the article was an expression of opinion rather than fact, rejecting the contention that the word “scam,” as used in the context of the article as a whole, was an accusation of fraud.

The word, she said, “has no precise meaning,” and “means different things to different people and is used to describe a wide range of conduct....from exaggerating the value of a product or charging too much for it to carrying out a massive criminal fraud.”

Margules wrote:

“It would not be unusual to see the word ‘scam’” used in a pure opinion piece expressing the author’s opinion of a restaurant, a product or service, a piece of legislation, or a business proposal....Thus, defendants’ use of the term ‘scam,’ by itself, does nothing to establish a probability Redmond will prevail against them in a libel claim.”

The case is Redmond v. Gawker Media, LLC, A132785.


Copyright 2012, Metropolitan News Company