Wednesday, May 4, 2016
Court Says Libel Suit Against Law Firm Was SLAPP
By a MetNews Staff Writer
The Court of Appeal for this district has ordered that a libel suit filed against a law firm by a corporation it had bested in litigation be thrown out under the anti-SLAPP law.
In a 2-1 decision, the court said a “celebratory press release” by the firm of Phillips & Cohen LLP after winning a favorable jury verdict in a False Claims Act suit should be read in context as a fair and true report of a judicial proceeding, and thus protected by the litigation privilege.
The underlying action was a qui tam suit against J-M Manufacturing Company, Inc. brought on behalf of some 200 public entities. The complaint sought over $1 billion in damages allegedly caused by substandard PVC pipe sold by the defendants.
A jury trial of claims by five representative plaintiffs resulted in a finding that the defendant presented a materially “false or fraudulent” claim to the federal government, with the intent requisite to a FCA violation. The jury specifically found that the company “falsely represented uniform compliance” with industry standards for long-term strength and durability.
In the press release, the law firm said J-M had committed “fraud” and faced “billions” in damages “for making and selling faulty water system pipes.” In suing for defamation and trade libel, the company claimed that the law firm falsely implied that the jury had found the pipe to be defective, in the products liability sense, even though that was not an issue in the trial.
Los Angeles Superior Court Judge Elizabeth A. White denied the firm’s anti-SLAPP motion, reasoning that a reasonable jury might find that the press release “declared or implied a provably false assertion of fact” because the quit tam jury “did not find that all the pipes were faulty.”
Presiding Justice Dennis Perluss, however, in a Court of Appeal opinion joined by Justice Laurie Zelon, said the law firm might be “guilty of self-promotion and puffery,” but that “its description of the evidence at trial and the jury’s special verdict in the November 15, 2013 press release falls comfortably within the permissible degree of flexibility and literary license afforded communications to the media concerning judicial proceedings."
Los Angeles Superior Court Judge Stan Blumenfeld, sitting on assignment, dissented. He argued that it was up to a jury to decide whether the release fairly and truthfully reported the outcome of the trial, that the press release as a whole might be read as defamatory, and that “the literary license doctrine did not permit Phillips & Cohen to falsely insinuate that the jury had found J-M’s pipes to be defective.”
The case is J-M Manufacturing Company, Inc. v. Phillips & Cohen, LLP, 16 S.O.S. 2240.
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