Business and Facilities – Defamation/Anti-SLAPP

Chelsea Filer is an adult woman who, as a teenager, was sent against her will to a residential treatment center for youth. She had an extremely negative experience, and went on to become an advocate for youth who are sent to such programs. She learned about Diamond Ranch Academy (DRA), which was not the facility she attended, after watching a TV show about troubled youth. She then started a website called DRASurvivors.com.

In response to this website, DRA created its own site, called TheRealDRASurvivors.com, which aimed to dispel what DRA considered lies in Filer's site. DRA also filed a defamation suit against Filer regarding her website and comments on her public Facebook page. The statements in question accuse DRA of torturing its residents physically, psychologically, and emotionally, failing to provide adequate medical care, and violating their basic human rights.

Filer filed a motion to strike DRA's complaint under the California anti-SLAPP statute. (Although DRA is in Utah, there were procedural reasons for Filer's use of the California law.) SLAPP stands for "strategic lawsuit against public policy" and anti-SLAPP laws are designed to protect defendants from having to litigate meritless claims that are merely attempts to chill their first amendment rights. Under this law, Filer must show that the cause of action arises from acts through which she was expressing her right to free speech in connection with a public issue. DRA then must establish a probability that it will prevail on the claims. If DRA cannot satisfy this burden, the court must dismiss its claims against Filer.

The first issue the court addressed is whether Filer's statement concerns a public issue. Protected speech includes written or oral statements made in a place open to the public in connection with an issue of public interest. Under California law, a publicly accessible website is a public forum for these purposes.

The court found Filer did prove that the use of private for-profit teen rehabilitation centers like DRA is a public issue. There are legislative and regulatory discussions about these facilities, even a federal Government Accountability Office publication about concerns about these facilities. Therefore, DRA must prove it is likely to prevail on all claims.

The court first considered DRA's slander claims against Filer. These claims pertained to comments that Filer discussed conditions at DRA with former students and a police sergeant. However, the actual content or dates of the conversations are not identified. DRA did not show enough facts to demonstrate it would prevail on these claims, and therefore the claims were dismissed.

Next the court considered the libel claims, which, under the law, must be false, defamatory, and not privileged. If DRA is a public figure, DRA must show Filer made her statements with actual malice. If DRA is a private figure, DRA must show that Filer acted negligently. The categories of statements here that might apply to Filer were statements that charged criminal conduct, or conduct incompatible with the exercise of a lawful business. In a related matter, the court ruled against Filer that all of the statements in question were published prior to the one-year statute of limitations. The court found that she re-published many statements within the relevant time period when she altered blog posts on her website, updating it with new information that involved substantial and significant changes to the original post. The court did not strike the libel claims.

With respect to the claims of false statements, DRA was able to submit evidence that directly contradicted information in the declarations produced by Filer. For example, whereas Filer accused DRA of using unlicensed therapists, DRA produced information showing that it is in fact a licensed treatment facility. The court noted that at this stage of litigation, it cannot judge the credibility of the evidence; it must take DRA's declarations as true. Therefore, the false statement portions of the claim could proceed.

Next, Filer contended that DRA was a limited purpose public figure and therefore they would have to demonstrate actual malice on her part to prevail. To determine whether this was true, the court needed to examine DRA's role in the public controversy surrounding these facilities. Individuals who actively make themselves part of the controversy will be considered limited public figures. Here, DRA did not engage in the type of activity to consider it a limited public figure. The company did make a website to counter Filer's website and post YouTube videos, but simply marketing or defending itself as a business institution does not make DRA a public figure. The court reasoned that if that were the case, almost any business with a social media presence could be considered a public figure.

DRA presented incontrovertible evidence that it has suffered economic injury as a result of Filer's activities. The court also found DRA had established a probability of prevailing on its claim of intentional interference with economic relations, as Filer admitted she was trying to get parents not to send their children to DRA.

Filer tried to escape liability by claiming she was simply the publisher of third party statements, and therefore protected by the Communications Decency Act. But the court did not agree with that characterization, finding that Filer did not simply host the website, but instead adopted the negative postings as her own and used them to create content for her website.

Both parties asked for attorney's fees, but under the anti-SLAPP statute, only the prevailing party can recover the fees. Since neither party was completely successful, the court found neither DRA nor Filer to be entitled to attorney's fees.

Note:

This is a fascinating case because it illustrates the kinds of challenges schools can face from a disgruntled employee or family. Whereas once an angry family could spread rumors in their circle of acquaintances, now, with the internet, the message can go national in days. Media websites are often drawn to stories involving controversy at private schools. Schools should be monitoring their online reputations, and should consult with legal advisors if it seems that an angry family or employee has crossed the line from expressing opinions to publishing defamatory statements about the school.

Diamond Ranch Academy, Inc. v. Filer, 2016 WL 633351.