Manufactured Home Communities Inc. v. County of San Diego

544 F.3d 959, 2008 WL 600974

Opinions

Opinion by Judge O’SCANNLAIN; Dissent by Judge CALLAHAN.

O’SCANNLAIN, Circuit Judge:

We must decide whether a county supervisor’s hostile public statements directed at a company owning and managing several local mobile home parks were actionable as a matter of law.

I

Manufactured Home Communities, Inc. (“MHC”), a real estate investment trust headquartered in Chicago, owns and operates mobile home parks through the United States. The three parks at issue here — Lamplighter, Rancho Valley, and Rancho Mesa — lie within unincorporated areas of San Diego County’s (“County”) Supervisorial District Two. At all relevant times Dianne Jacob (“Jacob”) served as the county supervisor for that district.

Beginning in July 2002, MHC initiated phased rent increases at the three parks after sending 90-day notices as required by local law. In response to the rent increases, tenants of Lamplighter park contacted Jacob, leading to the following actions complained of by MHC, as summarized by the district court:

On November 15, 2002, Jacob issued a news advisory stating that MHC was preying upon elderly tenants with fixed incomes by raising rents by 25%.

On November 16, 2002, Defendant Jacob attended a tenants meeting at Lamplighter Park, where Defendant Jacob made several allegedly false statements about [Plaintiff], including the following: (1) statements that MHC is a greedy, profit-driven company that enjoys forcing the elderly out of their homes in order to move in more expensive homes for a greater profit; (2) a statement that “it would be interesting to see” if Plaintiff had engaged in any fraudulent actions; and (3) a statement that Defendant Jacob had spoken with County Counsel and District Attorney Bonnie Dumanis, who were “very interested” in following up on whether civil or criminal actions should be pursued against Plaintiff.

In a letter dated November 18, 2002, to Plaintiffs Chairman, Sam Zell, and distributed to Lamplighter Park tenants and attached to a subsequent civil complaint, Defendant Jacob made the following allegedly false statements: (1) Plaintiffs actions were “rent gouging at its worst” and indicative of “corporate greed”; (2) some “residents have already been forced to surrender their homes”; and (3) Plaintiffs rent increase was well above the 2003 Fair Market Rent of $539 for manufactured home spaces.

On or about December 10, 2002, Defendant Jacob allegedly stated to local media that MHC had lied to the Department of Environmental Health about [Plaintiffs] clean-up effort in response to a sewage spill at Rancho Valley Mobile Home Park.... Defendant Jacob allegedly also stated: (1) that Plaintiff is a “bad company” and that she wanted them “out of town,” (2) that they

“shouldn’t get away with” their lies, and (3) that she wanted “to make sure that they’re cited for every single offense ... and whatever actions need to be taken are taken, civil [sic] or criminally.”

On January 9, 2003, the San Diego Union Tribune published an article with Defendant Jacob’s statements “to the effect that [Plaintiff] was ‘preying on older people of limited economic means,’ and that she was going to ‘mak[e] things even hotter for the predatory company.’ ”

On April 5, 2003, Defendant Jacob allegedly falsely stated to tenants that Plaintiff made a practice of buying “distressed properties with the intent to run out the older residents to bring in newer homes,” and told tenants that since no rent control ordinance had been passed “ ‘we need to take other measures ... like litigation.’ ”

On at least six other occasions in 2003, Jacob made similar statements about MHC’s conduct.

On November 24, 2003, MHC filed suit against the County, lodging a variety of federal claims.¹ On December 30, 2004, MHC amended the complaint to add a federal claim against Jacob based on the alleged violation of MHC’s First Amendment rights. On February 1, 2005, MHC amended its complaint a second time to add state law claims of defamation and tortious interference with prospective economic advantage, against both the County and Jacob. On May 19, 2005, the district court granted defendants’ Motion to Strike State Tort Causes of Action, brought under the California anti-SLAPP (“Strategic Lawsuit Against Public Participation”) law and awarded attorneys’ fees to the County and Jacob on the motion to strike. And on May 25, 2005, the district court dismissed MHC’s remaining claims on summary judgment. MHC timely appeals.

II

A

California enacted its anti-SLAPP law in reply to a “disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech.” cal. Civ. Proc. Code § 425.16(a). The statute is designed to allow the swift dismissal of meritless claims that are aimed not at remedying legally cognizable harms but at chilling expression. To prevail on a motion to strike, a defendant must first make a prima facie showing that the suit arises from activity in furtherance of First Amendment rights of petition or free speech; once such a showing has been made, the plaintiff must then demonstrate a probability of prevailing on the claims. See Vess v. Cibar-Geigy Corp., 317 F.3d 1097, 1110 (9th Cir.2003).

A threshold question as to the probability of success on the merits is whether the statements giving rise to the complaint are actionable at all. The critical determination is whether the allegedly defamatory statements “convey[] a false factual imputation.” Kahn v. Bower, 232 Cal.App.3d 1599, 284 Cal.Rptr. 244, 249 (Cal.Ct.App.1991). But, “where potentially defamatory statements are published in a public debate, a heated labor dispute, or in another setting in which the audience may anticipate efforts by the parties to persuade others to their positions by the use of epithets, fiery rhetoric, or hyperbole, language which generally might be considered as statements of fact may well assume the character of statements of opinion.” Gregory v. McDonnell Douglas Corp., 17 Cal.3d 596, 131 Cal.Rptr. 641, 552 P.2d 425, 428 (Cal.1976). Ordinarily, this context-bound determination is a question of law for the court, but if the challenged statement or statements are “reasonably susceptible of an interpretation which implies a provably false assertion of fact,” then they may be considered by the jury “to determine whether such an interpretation was in fact conveyed.” Kahn, 284 Cal.Rptr. at 250.

B

Here, the district court found that the County and Jacob had succeeded in showing that Jacob’s statements giving rise to the lawsuit were in furtherance of rights to petition or free speech, and MHC does not challenge that determination. Thus the burden fell to MHC to make a showing as to the probability of success on the merits.

On that issue, the County and Jacob asserted, and the district court agreed, that the statements giving rise to the lawsuit were merely statements of opinion, rather than provably false assertions of fact, and were therefore not actionable.² The district court thus granted the motion to strike. While MHC concedes that some of Jacob’s statements were opinions uttered in the heat of political battle, it contends that a reasonable fact finder could find some of the statements to be actionable as provably false assertions of fact.

Specifically, MHC notes, for instance, Jacob’s statement that MHC “lied to the County. Said to the County that everything was fine, the sewage situation was fixed. And, in fact, it was not.” MHC argues that this statement refers to specific circumstances and times and therefore is susceptible of interpretation as a provably false assertion of fact. The district court found this statement to be “nothing more than rhetorical hyperbole and subjective opinion.” Similarly, MHC argues that a reasonable person could interpret Jacob’s statement that MHC “has a reputation throughout the country of running people out of older mobilehome parks, increasing the value of the park, and then selling it at a profit” as a falsifiable assertion of fact. Finally, MHC calls attention to Jacob’s claim that the incoming District Attorney was “very interested in following up to determine whether there are civil and/or criminal actions that should be filed against” MHC. In these instances, too, the district court found that the statements were not reasonably susceptible of interpretation as provably false assertions of fact.

While the district court may have been correct in its assessment that each of these statements is properly interpreted as an assertion of opinion rather than fact, a reasonable factfinder could disagree with that assessment. It does not seem unreasonable to imagine, for instance, that a juror could conclude Jacob meant as a matter of fact that MHC had lied about the sewage situation, or that she meant it as fact that MHC had a reputation for driving out elderly tenants. Nor does it seem unreasonable to imagine a juror interpreting a statement about the intentions of the incoming district attorney as a statement of fact, rather than mere opinion.³ Indeed, the district court’s decision, before concluding that this statement was not falsifiable, also declared that it was “not factually untrue.”⁴ If the district court can assess the truth or falsity of the claim, that seems a strong indication that it was a provably false assertion of fact, and therefore actionable.

Thus, as to the statements concerning these matters, we cannot declare as a matter of law that no reasonable person could construe them as provably false. Accordingly, we reverse the judgment of the district court as to these statements.⁵

In addition, we reverse the district court’s award of attorneys’ fees associated with the motion to strike.

C

The dissent disagrees with our treatment of the reasonable juror standard re garding actionable statements, and urges that the California Supreme Court gives wide latitude to judges to take such issues away from juries where the statements in question were made in the course of public debate. However, as the dissent recognizes, an essential component of an opinion is that it be “wholly subjective.” See Copp v. Paxton, 45 Cal.App.4th 829, 52 Cal. Rptr.2d 831 (1996) (“In making the distinction [between fact and opinion], the courts have regarded as opinion any broad, unfocused and wholly subjective comment.”) (internal quotation removed). Even under the standard adopted by the dissent, however, a reasonable listener could conclude that Jacob’s statements were founded in part on an objective, factual basis, especially in light of Jacob’s role as a public servant and her having made some of the relevant statements in response to a news reporter’s questions.

Likewise, we leave it to the jury to determine whether Jacob’s statements were opinions based upon express facts. A reasonable juror could conclude that Jacob did not “outline[ ] the facts available to [her]” sufficient to “mak[e] it clear that the challenged statements represent [her] own interpretation” of express facts. Partington v. Bugliosi, 56 F.3d 1147, 1156-57 (9th Cir.1995). Here, Jacob’s statements were not clearly attached to such an outline of fact, nor did she explicitly link her statements to an express factual basis. See id. at 1156 (holding that statements in a published work were non-actionable opinions because they were preceded by an extensive factual discussion, such that the author “can only be said to have expressed his own opinion after having outlined all the facts that serve as the basis for his conclusion”); Standing Comm. on Discipline v. Yagman, 55 F.3d 1430, 1438-40 (9th Cir.1995) (holding that a declarant’s statement was non-actionable opinion where he explicitly disclosed its factual basis). Accordingly, unlike Part-ington and Standing Committee, in this case a reasonable listener could conclude that Jacob “implied] there are other, unstated facts supporting” her comments. Franklin v. Dynamic Details, 116 Cal. App.4th 375, 10 Cal.Rptr.3d 429, 436, 438 (Ct.App.2004) (“The dispositive question is whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.”).

The dissent also would hold that MHC failed to proffer sufficient evidence to establish a probability of success on the merits. However, the district court granted Jacob’s motion to strike solely on the erroneous ground that her statements were non-actionable opinions. MHC’s probability of success was not addressed in the parties’ briefs or at oral, argument. Accordingly, we leave it to the district court to consider that issue in the first instance.

Ill

For the foregoing reasons, the judgment of the district court is REVERSED in part, AFFIRMED in part, and REMANDED for further proceedings. The parties shall bear their own costs.

Footnotes

1

. In a concurrently filed memorandum disposition, we affirm the district court’s grant of summary judgment to defendants as to these issues. See Manufactured Home Communities, Inc. v. County of San Diego, Nos. 05-56401 & 05-56559, 2008 WL 600974 (filed March 6, 2008).

2

. There is no categorical exemption of "opinion” from defamation law, but if in context no reasonable person would interpret the challenged statement to be conveying a false factual imputation, then the First Amendment protects the speech from liability. Kahn, 284 Cal.Rptr. at 249-250.

3

. The dissent gives persuasive reasons why a fact finder might well regard these statements as non-actionable opinions, but that is not enough. While we might, as fact finders, be persuaded by the dissent's arguments, we cannot conclude that they provide the only reasonable interpretation of the statements at issue, and under California law — and United States Supreme Court precedent, see Milko-vich v. Lorain Journal, 497 U.S. 1, 19, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990) — we must conclude that the district court erroneously determined that Jacob's statements were non-actionable.

4

. It is not clear whether the district court meant by calling the statement "not factually untrue" that it was making a finding that the statement was true as a description of the incoming district attorney's intentions or indicated, as the district court also suggests, "nothing more than ... Jacob’s strong opinion that [MHC’s] actions should be investigated.” We conclude, in any event, that MHC ought to be given the opportunity to put the statement before a jury to determine whether an ordinary person would have understood the statement as a factual assertion, and whether it was false.

5

.We agree with the district court, however, that Jacob’s statements that MHC is "unscrupulous” and “greedy” and engaged in "rent gouging” were the kind of heated commentary that is often part of such public debates, and are not actionable as provably false assertions of fact.