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Wednesday, September 18, 2019

Calif. appeals court sides with Facebook in lawsuit accusing CEO, general counsel of defamation

By Jessica Karmasek | Mar 9, 2017

LOS ANGELES (Legal Newsline) - A California appeals court has thrown out a case brought by an attorney accusing Facebook CEO Mark Zuckerberg and the social media website’s general counsel of defamation.

A three-judge panel of the California Court of Appeal, First Appellate District, Division Five, upheld a trial court’s decision in its Feb. 15 ruling.

Justice Henry E. Needham Jr. authored the appeals court’s opinion. Presiding Justice Barbara J.R. Jones and Justice Terence L. Bruiniers concurred.

At issue is a quote, issued by Facebook’s general counsel and used in various newspapers, about a malicious prosecution action filed by Zuckerberg over an allegedly fraudulent contract.

Attorney Paul Argentieri, one of the lawyers named in the malicious prosecution action, was an attorney for Paul Ceglia throughout Ceglia’s lawsuit, which was filed against Facebook and Zuckerberg over a contract that allegedly granted him ownership of Facebook.

Ceglia’s lawsuit was dismissed on the grounds that it was a fraud on the court and Ceglia had spoliated evidence.

On Oct. 20, 2014, Facebook and Zuckerberg sued Argentieri and others for malicious prosecution and deceit.

On the same day, Facebook’s general counsel, Colin Stretch, sent an email to various members of the press stating the law firms named in the malicious prosecution complaint, including Argentieri, knew Ceglia’s lawsuit was based on forged documents.

“We said from the beginning that Paul Ceglia’s claim was a fraud and that we would seek to hold those responsible accountable. DLA Piper and the other named law firms knew the case was based on forged documents yet they pursued it anyway, they should be held to account,” Stretch stated in his email, according to court documents.

After a court found that the complaint did not state a claim for malicious prosecution against certain defendants, Argentieri sued Facebook, Zuckerberg and Stretch in 2015, alleging he was defamed by Stretch’s statement.

However, a San Francisco Superior Court judge granted the defendants’ request to strike the complaint under the anti-Strategic Lawsuit Against Public Participation, or anti-SLAPP, laws.

SLAPP lawsuits are intended to censor, intimidate and silence critics by burdening them with the cost of a legal defense. Such lawsuits have been made illegal in my jurisdictions on the grounds they impede freedom of speech.

Argentieri appealed the state court’s decision.

The state appeals court, in its ruling last month, sided with the defendants.

It explained that Stretch’s statement is protected by the fair and true reporting privilege; that Argentieri failed to establish a “probability of prevailing” on his defamation claim; and that the trial court did not err in granting the defendants’ anti-SLAPP motion.

“There is no dispute that Stretch’s Statement was a report or communication to a ‘public journal’ concerning the malicious prosecution action against Argentieri and others. Moreover, in context, Stretch’s Statement was a ‘fair and true’ report of that proceeding,” Needham wrote. “It essentially asserted that respondents sought to hold accountable the named lawyers for Ceglia because they knew Ceglia’s case was based on the forged Work for Hire Contract. And that was the gist of their malicious prosecution action as well. Argentieri’s arguments to the contrary are unavailing.”

Needham continued for the appeals court, “It is sufficient if the statement conveys the ‘gist’ of the action, as measured by ‘how those in the community where the matter was published would reasonably understand it.’ Here, both the malicious prosecution action and Stretch’s Statement asserted that Ceglia’s lawyers knew the Work for Hire Contract was forged; the fact that the malicious prosecution action also left open the possibility that the lawyers merely should have known of the fraud, or made some of the allegations on information and belief, does not make Stretch’s Statement so great a distortion as to render it unfair or untrue for purposes of section 47, subdivision (d).”

Joseph Alioto, who represents Argentieri, told Law360 last month that they plan to appeal the decision.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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