Overhill Farms, Inc. v. Lopez
190 Cal. App. 4th 1248
Cal. Ct. App.2010Background
- IRS notified Overhill that 231 current and former employees had invalid Social Security numbers and warned of penalties.
- Overhill terminated employees identified by the IRS who did not provide valid numbers or respond to correction requests.
- Defendants Lopez and others organized protests with press releases, signs, leaflets, and handbills accusing Overhill of racist terminations and using SSA-discounted 'discrepancies' as pretext.
- Overhill sued for defamation, intentional interference with prospective economic advantage, intentional interference with contract, extortion, and unfair competition.
- The trial court granted anti-SLAPP relief for the unfair competition claim but denied otherwise; on appeal the order was affirmed by the majority and reversed by a dissent.
- The majority held that defendants’ statements about racist firings and pretextual terminations were provably false facts under Milkovich and related tests, and that the claims did not warrant striking the complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the anti-SLAPP statute apply to this defamation dispute? | Overhill argues the statements arise from protected activity and warrant a probability of prevailing. | Defendants contend the conduct is protected but seek to limit to e(3) and related provisions. | Yes; the court found the conduct protected and proceeded to the merits. |
| Did Overhill show a probability of prevailing on its defamation claim by proving provably false statements? | Overhill asserts defendants’ statements falsely accused it of racist firings and pretextual terminations. | Defendants claim statements were opinion or not provably false given context. | Yes; sufficient evidence showed provably false statements of fact under totality of circumstances. |
| Were the statements about Social Security discrepancies actionable as false statements of fact? | Overhill contends statements about discrepancies being used as a pretext for racist terminations are false. | Defendants argue discrepancies were merely factual descriptions of the issue and not false. | Yes; the statements were capable of being proven false in the context presented. |
| Is the defamation claim preempted by NLRA preemption or labor-dispute doctrine? | Overhill asserts no preemption for the defamation claim arising from protests. | Defendants argue a labor-dispute framework applies and could preempt liability. | Not preempted; the defamation claim is actionable under state law despite labor-dispute context. |
| Were the trial court’s evidentiary rulings reversible error? | Overhill argues rulings improperly excluded or admitted evidence affecting the anti-SLAPP analysis. | Defendants assert errors in evidentiary rulings could reverse the decision. | No reversible error; rulings not shown to prejudice substantial rights. |
Key Cases Cited
- Milkovich v. Lorain Journal Co., 497 U.S. 1 (U.S. Supreme Court 1990) (establishes provably false factual assertions may be actionable; distinguishes opinion from facts)
- Franklin v. Dynamic Details, Inc., 116 Cal.App.4th 375 (Cal. Ct. App. 2004) (totality of the circumstances test for defamation; fully disclosed facts limit liability)
- Linn v. Plant Guard Workers, 383 U.S. 53 (U.S. Supreme Court 1966) (labor disputes receive heightened protections; but not for defamation conducted in bad faith)
- Operating Engineers v. Jones, 460 U.S. 669 (U.S. Supreme Court 1983) (NLRA preemption analysis for labor dispute-related claims)
- Sutter Health v. UNITE HERE, 186 Cal.App.4th 1193 (Cal. Ct. App. 2010) (context of labor disputes and protected speech; informs modern anti-SLAPP application)