BKP, INC., Ella Bliss Beauty Bar, L.L.C., Ella Bliss Beauty Bar 2, L.L.C., and Ella Bliss Beauty Bar 3, L.L.C., Plaintiffs-Appellants,
v.
KILLMER, LANE & NEWMAN, LLP, Mari Newman, and Towards Justice, Defendants-Appellees.
Court of Appeals No. 20CA0298
Colorado Court of Appeals, Division A.
Announced December 2, 2021
Sherman & Howard LLC, Raymond M. Deeny, Heather Fox Vickles, Brooke A. Colaizzi, Denver, Colorado, for Plaintiffs-Appellants
Treece Alfrey Musat P.C., Reza D. Rismani, Denver, Colorado; Killmer, Lane & Newman, LLP, Thomas Kelley, Denver, Colorado, for Defendants-Appellees Killmer, Lane & Newman, and Mari Newman
The Law Office of Brian D. Gonzales, Brian D. Gonzales, Fort Collins, Colorado; Harter Secrest & Emery LLP, Brian M. Feldman, Rochester, New York, for Defendant-Appellee Towards Justice
Opinion by CHIEF JUDGE BERNARD
¶ 1 The plaintiffs in this case, BKP, Inc., Ella Bliss Beauty Bar, L.L.C., Ella Bliss Beauty Bar 2, L.L.C., and Ella Bliss Beauty Bar 3, L.L.C., which we shall collectively call "the employer," filed a lawsuit against defendants, an attorney named Mari Newman and two law firms, Kilmer, Lane & Newman, LLP, and Towards Justice, which we shall cumulatively refer to as "the attorneys." The trial court granted the attorneys’ C.R.C.P. 12(b)(5) motions to dismiss the lawsuit. The employer appeals. We affirm in part, we reverse in part, and we remand the case to the trial court for further proceedings.
I. Background
¶ 2 In May 2018, the attorneys filed a class action lawsuit in federal court on behalf of a nail technician — a person who does manicures and pedicures — who had worked for the employer. The members of the putative class were other nail technicians who had also worked for the employer. The complaint alleged that the employer had violated various wage and employment laws. On the same day, during a press conference announcing the federal lawsuit, Ms. Newman made four allegedly false statements:
1. "For no pay whatsoever, [the nail technicians] have to clean the business, including the bathrooms, because [the employer] is simply too cheap to pay its workers the money they deserve."
2. "Instead of paying the [nail technicians] for every hour that they work, [the employer] pick[s] and choose[s] and only pay[s] for the hours [it] feel[s] like paying."
3. "It is time for businesses to quit financially exploiting women. Oppression of vulnerable workers remains all too common, and this is a particularly audacious case."
4. "It's fairly common in industries that employ populations they think they can take advantage of, like women or immigrants."
¶ 3 Along with the press conference, the attorneys issued a press release that contained, in addition to the third statement above, the allegedly false statement that "[the employer] forced its [nail] technicians to perform janitorial work without pay, refused to pay overtime, withheld tips, and shorted commissions."
¶ 4 About one year after these statements were made, the employer sued the attorneys, asserting that the four statements in the press conference and the statements in the press release amounted to both defamation and intentional interference with contractual relations.
¶ 5 The attorneys asked the trial court to dismiss the claims under C.R.C.P. 12(b)(5), arguing that the statements were not actionable
as defamation because they were either (1) subject to the litigation privilege, which we describe below; (2) protected by the Noerr-Pennington doctrine, which we also describe below; or (3) opinions protected by the First Amendment.
¶ 6 In a written order, the trial court granted the attorneys’ motions to dismiss. With respect to the press conference, the court decided that part of the first statement that Ms. Newman made — "For no pay whatsoever, they have to clean the business, including the bathrooms" — and the second statement she made were protected by the Noerr-Pennington doctrine. It then ruled that the latter part of Ms. Newman's first statement — "[The employer] is simply too cheap to pay its workers the money they deserve" — along with the third and fourth statements were protected by the First Amendment because they were opinions, not statements of fact. Last, the court determined that one statement in the press release — "It is time for businesses to quit financially exploiting women. Oppression of vulnerable workers remains all too common, and this is a particularly audacious case"— was protected by the First Amendment because it was an opinion; and that the other statement in the press release — "[The employer] forced its [nail] technicians to perform janitorial work without pay, refused to pay overtime, withheld tips, and shorted commissions." — was protected by the Noerr-Pennington doctrine.
¶ 7 As for the employer's intentional interference with contractual relations claim, the court dismissed it too, concluding that (1) the allegations were conclusory; and (2) there were no actionable defamation allegations that could form the basis for the claim.
II. C.R.C.P. 12(b)(5) Motions
¶ 8 A C.R.C.P. 12(b)(5) motion to dismiss for failure to state a claim upon which relief can be granted tests the formal sufficiency of a plaintiff's complaint. Allen v. Steele ,
¶ 9 When deciding whether to grant a motion to dismiss, a trial court must accept all the allegations of material fact as true, and it must look at them in the light most favorable to the plaintiff. Allen ,
III. Analysis
A. The Litigation Privilege
¶ 10 We start with the litigation privilege. The trial court's order did not address the attorneys’ litigation privilege argument. But both sides discussed it in their trial court briefs, the attorneys submit in their answer brief that the litigation privilege controls the outcome of this case, and the employer addresses that submission in its reply brief.
¶ 11 "[W]e are in as good a position as the trial court to assess the viability of [the] complaint." Hemmann Mgmt. Servs. v. Mediacell, Inc. ,
¶ 12 Whether the litigation privilege applies is a question of law. Club Valencia Homeowners Ass'n v. Valencia Assocs. ,
¶ 13 We begin our analysis by asking: What is the litigation privilege?
¶ 14 As a division of this court explained in Club Valencia ,
1. a lawyer "is absolutely privileged to publish defamatory matter" about another person or party;
2. "in communications preliminary to a proposed judicial proceeding"; or
3. "in the institution of, or during the course and as a part of, a judicial proceeding" in which the lawyer participates as counsel;
4. "if it has some relation to the proceeding."
¶ 15 "The purpose of this privilege ... is to afford litigants the utmost freedom of access to the courts to preserve and defend their rights and to protect attorneys during the course of their representation of clients." Club Valencia ,
¶ 16 But the privilege has limits. "To be privileged, the alleged defamatory matter must have been made in reference to the subject matter of the proposed or pending litigation, although it need not be strictly relevant to any issue involved in it." Club Valencia ,
¶ 17 Over the ensuing years, divisions of this court have refined the doctrine.
¶ 18 Significantly, in Buckhannon v. U.S. West Communications, Inc. ,
¶ 19 Five years later, in Merrick v. Burns, Wall, Smith & Mueller, P.C. ,
¶ 20 Then, in Begley v. Ireson ,
¶ 21 Most recently, in Begley II ,
broadly to immunize nondefamatory conduct." Id. at ¶ 21 (citation omitted).
¶ 22 Although the court of appeals’ decisions discussed above covered considerable ground, no Colorado case has considered whether the litigation privilege should extend to statements made during press conferences or in press releases that occur or are issued after litigation has begun. We look to decisions from other states that have addressed those circumstances for guidance. See, e.g. , id. at ¶ 24 ("[W]e note that applying the litigation privilege to shield nondefamatory litigation conduct is consistent with decisions from other jurisdictions.").
¶ 23 Some decisions refuse to extend the privilege to what they call "litigating in the press," or they focus on how widely the statements are disseminated. This means that attorneys who make statements during press conferences, in press releases, and on social media do so at their own risk. Rothman v. Jackson ,
¶ 24 Other states, meanwhile, apply the privilege on a case-by-case basis. See Brown v. Gatti ,
¶ 25 Only a handful of states have considered the question before us now: If we assume that the litigation privilege does not generally apply to statements made during press conferences and in press releases, should an exception be made for class action lawsuits? One state, Arizona, has answered the question "no," while three others, Tennessee, Maryland, and New Mexico, have said "yes." We examine these cases next.
¶ 26 Green Acres Trust v. London ,
funeral home then sued the lawyers for defamation. Id.
¶ 27 On appeal, the Arizona Supreme Court decided that the litigation privilege did not apply to the statements that the lawyers had made to the reporter. The court reasoned that "authorities generally conclude that since publication to the news media lacks a sufficient relationship to judicial proceedings, it should not be protected by an absolute privilege." Id. at 622 (citing Asay v. Hallmark Cards, Inc. ,
¶ 28 The next case to contend with the issue was Simpson Strong-Tie Co. v. Stewart, Estes & Donnell ,
¶ 29 Noting the centuries-old, common law roots of the litigation privilege, the Tennessee Supreme Court concluded that both the advertisement and announcement were protected as communications soliciting clients that had been made before a case was filed. Id. at 24. The court observed that, "[i]n some situations, attorneys may have no practical means of discerning in advance whether the recipients of the communication have an interest in the proposed proceeding." Id. at 26. "In that event," the court continued, "the attorney can only communicate with those having the ability and desire to join the proposed litigation by publishing the statement to a wider audience, which may include unconnected individuals." Id.
¶ 30 Recognizing that excessive publication of statements could be problematic, however, the court imposed the following limitation: "[I]f the attorney has a feasible way of discerning which recipients have an interest in the case, but nevertheless publishes the defamatory communication to those having no interest in the case, the privilege would not apply." Id.
¶ 31 Last, the court noted that suing lawyers for defamation is not the only way to hold them accountable for making false and defamatory statements. Id. at 27. "For example," the court continued, a lawyer whose statements "result in a baseless lawsuit" may face a malpractice action, a malicious prosecution action, or both; the lawyer could face sanctions for violating Tennessee's version of C.R.C.P. 11 ; and the lawyer could be disciplined under the state's rules of professional conduct "for violating ethical requirements which prohibit the filing of frivolous claims or soliciting employment by means of fraud or false or misleading statements." Id.
¶ 32 Maryland took up the issue in Norman v. Borison ,
¶ 33 The court also explained that the newspaper articles containing the allegedly defamatory statements "provided readers (i.e. , possible class members) with details about how the mortgage rescue scam worked, when it took place, who was involved ..., and who was targeted." Id. Accordingly, the court reasoned that lawyers should be allowed to engage in the "public promotion" of class action lawsuits before the class is certified, so long as "framing the suit as a
‘class action’ ... is not shown to have been a subterfuge for funneling defamatory statements to the press." Id. at 718. Distinguishing Kennedy v. Cannon ,
¶ 34 The most recent decision to discuss this issue is Helena Chemical Co. v. Uribe ,
¶ 35 On appeal, the court held that all of the lawyer's statements — both during the community meeting and during the press conference — were protected by the litigation privilege. Id. at 242-46. Generally, the court explained, "we agree with those [jurisdictions] that have held that the absolute privilege may apply to statements made to the press." Id. at 244. Citing favorably to Norman and Simpson Strong-Tie Co. , the court observed that, "[i]n the context of class action or mass-tort litigation, the most economical and feasible method of informing potential litigants of prospective litigation affecting their interests may be through the press." Id. at 245. As a result, the "use of the press as a conduit to communicate with additional potential class action or mass-tort litigants may be reasonably related to the object of the contemplated judicial proceeding." Id.
¶ 36 With respect to the lawyer's press conference statement, the New Mexico Supreme Court concluded that it was privileged because it repeated the allegations of the complaint. Id. at 246-47. "Moreover," the court continued, the statement "furthered the object of this mass-tort litigation by educating others in the affected community about the need for and availability of legal representation." Id. at 247.
¶ 37 The attorneys in this case rely on this trio of cases — Simpson Strong-Tie Co. , Norman , and Helena Chemical Co. — to contend that their statements are protected by the litigation privilege. For the purposes of resolving this appeal, we will assume, without deciding, that, even if Colorado were one of the states that would generally deny the litigation privilege to any and all statements that lawyers make to the press, see Rothman ,
¶ 38 We first see that the statements that Ms. Newman made during the press conference and those contained in the press release were made after the class action case had been filed. In other words, there is no question that the comments were made in connection with a pending lawsuit.
¶ 39 Importantly, the attorneys write in their answer brief that their purpose in speaking to the press was to "allow[ ] [them] to promote their class action and potentially reach other ... nail technicians" who had worked for the employer. "Those ... workers," the attorneys continue, "could join the suit as class members or additional class representatives, step forward as witnesses, or pursue the claims themselves outside the class action." As a result, the attorneys finish up, the statements to the press "promoted the class action, as the litigation privilege gives them freedom to do." Said differently, according to the attorneys, their purpose in
speaking with the press and issuing the press release was to reach nail technicians who had worked for the employer.
¶ 40 Yet the complaint in the federal lawsuit undermines the need to engage in that form of communication. The part of the complaint setting out the nail technicians’ reasons for why the case should be certified as a class action stated that "[t]he class is so numerous that joinder of all potential class members is impracticable." "Plaintiff," the complaint continued, "does not know the exact size of the class since that information is within the control of [the employer]." So far, so good.
¶ 41 Crucially, however, the complaint "estimates that, based on the size of [the employer's] operations, the class is composed of well over 80 persons." It adds that "[t]he exact size of the class will be easily ascertainable from [the employer's] records" and that "[t]he contours of the class will be easily defined by reference to the payroll documents [the employer was] legally required to create and maintain." (Emphasis added.) In other words, the complaint admits that identifying the members of the class would be easy.
¶ 42 Relying on Simpson Strong-Tie Co. ,
¶ 43 As for Norman , the Maryland Court of Appeals noted that, for lawyers, "we ... require ... the defamatory statement have some rational relation to the matter at bar before unfurling the umbrella of absolute privilege."
¶ 44 Last, the New Mexico Supreme Court observed in Helena Chemical Co ., ¶ 35, that a lawyer's statement during a press conference "furthered the object" of the case "by educating others in the affected community about the need for and availability of legal representation." In this case, in contrast, there was no need to educate potential class members through the press when, to reiterate, the members of the class for the federal lawsuit would be "easy" to identify.
¶ 45 We therefore conclude that the three cases upon which the attorneys rely do not support their position, at least at this stage of the proceedings, in which we are limited to considering the complaint, any attachments to the complaint, and any matters about which we could take judicial notice. See Norton , ¶ 7.
B. The Noerr-Pennington Doctrine
¶ 46 The Noerr-Pennington doctrine is named for two United States Supreme Court cases, Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc. ,
¶ 47 As we explain below, we conclude that there are two reasons why the doctrine does not apply in this case to shield the attorneys from liability.
¶ 48 Under the First Amendment, one has the right to petition the government to redress grievances. In contrast to
the right to free speech, which "fosters the public exchange of ideas that is integral to deliberative democracy," the right to petition "allows citizens to express their ideas, hopes, and concerns to their government and their elected representatives." Borough of Duryea v. Guarnieri ,
¶ 49 In light of this right, the Court in Noerr held that a business's publicity campaign in support of the passage of certain types of legislation was petitioning activity immune from antitrust liability under the Sherman Act, even though the legislation might harm the business's competitors.
¶ 50 Over the past fifty-plus years, there has been considerable debate about the extent of the doctrine's applicability, and many related questions are yet unresolved. See, e.g. , Boyer v. Health Grades, Inc. ,
¶ 51 When analyzing limits on the doctrine's reach, we see that it not only protects statements made in litigation, but it also protects conduct that is incidental to the prosecution of a lawsuit. Columbia Pictures Indus., Inc. v. Pro. Real Estate Invs., Inc. ,
¶ 52 In this case, the statements made at the press conference and in the press release merely described the federal lawsuit without advancing the nail technicians’ interest in it; the statements and the press release were simply a means of publicizing it. As a result, they were not incidental to prosecuting it. See Wisk Aero LLC ,
any manner, affect it or advance [the party's] interests in it.").
¶ 53 As we have explained above when discussing the litigation privilege, potentially subjecting the attorneys to liability would not hamper the nail technicians’ ability to locate potential class action members. See id. at *9 n.7 (observing that the outcome of the case would be different if "the blog post or press release served some purpose in the litigation," such as being "part of a class action notice plan, a search for class members, a search for witnesses, or something similar"); Arista Networks, Inc. v. Cisco Sys., Inc. , No. 16-CV-00923-BLF,
¶ 54 We therefore conclude that part of the first statement that Ms. Newman made during the press conference — "For no pay whatsoever, they have to clean the business, including the bathrooms" — and the second statement made during the press conference — "Instead of paying the [nail technicians] for every hour that they work, [the employer] pick[s] and choose[s] and only pay[s] for the hours [it] feel[s] like paying." — along with one statement made in the press release — "[The employer] forced its [nail] technicians to perform janitorial work without pay, refused to pay overtime, withheld tips, and shorted commissions" — were not incidental to the prosecution of the federal lawsuit.
¶ 55 But even if the statements were incidental to the prosecution of the federal lawsuit, we are also unconvinced that the Noerr-Pennington doctrine applies to defamation lawsuits, such as the one that the employer has filed in this case.
¶ 56 As explained in Boyer , our supreme court has relied on the Noerr-Pennington doctrine "both for the proposition that the right to petition the government has been applied to immunize from legal liability in subsequent litigation various forms of administrative and judicial petitioning activity, and for the proposition that this right to petition is not without limits." Boyer , ¶ 9.
¶ 57 Looking to those limits, "[t]he First Amendment does not grant a license to use the courts for improper purposes." Protect Our Mountain Env't, Inc. ,
¶ 58 In this regard, the First Amendment does not absolutely protect defamatory speech. Gertz v. Robert Welch, Inc. ,
¶ 59 We now turn to the intersection of the Noerr-Pennington doctrine and defamation claims. In Smith v. McDonald ,
too and affirmed the circuit court's opinion, explaining that "[t]he right to petition is guaranteed; the right to commit libel with impunity is not." McDonald ,
¶ 60 Before the Supreme Court decided McDonald , at least two states had decided that the Noerr-Pennington doctrine barred defamation claims. Bass v. Rohr ,
¶ 61 A significant number of post- McDonald cases conclude that the Noerr-Pennington doctrine does not bar defamation claims. See Whelan v. Abell ,
¶ 62 We recognize that some post- McDonald courts have decided to grant immunity against defamation claims, and they have discussed the Noerr-Pennington doctrine in doing so. See Brownsville Golden Age Nursing Home, Inc. v. Wells ,
¶ 63 Turning to this case, the first claim in the employer's complaint is for defamation per se/per quod. The second claim is for intentional interference with contractual relations, but it is based on the defamation claim: "the attorneys, by means of their defamatory statements ," intentionally caused employees and customers "to terminate their contracts" with the employer. (Emphasis added.) Because the two claims are grounded solely on defamation, we conclude that the Noerr-Pennington doctrine does not apply to insulate the attorneys from them. See, e.g. , McDonald ,
C. Opinion
¶ 64 We next address whether certain statements that Ms. Newman made during the press conference were opinions protected by the First Amendment.
¶ 65 The issue of whether a statement is defamatory is a question of law that we review de novo. Zueger v. Goss ,
right of free speech, prompt resolution of defamation actions, by summary judgment or motion to dismiss, is appropriate." Fry v. Lee ,
¶ 66 To determine whether a statement is defamatory, courts ask two questions. Keohane v. Stewart ,
¶ 67 To answer the second question, we consider "how the assertion is phrased"; "the context of the entire statement"; and "the circumstances surrounding the assertion, including the medium through which the information is disseminated and the audience to whom the statement is directed." Id. ; see also Milkovich ,
¶ 68 We discover similar reasoning in the Restatement (Second) of Torts § 566 (Am. L. Inst. 1977), which states that "[a] defamatory communication may consist of a statement in the form of an opinion, but a statement of this nature is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion."
¶ 69 Comment b to section 566 informs our analysis. It states that there are "two kinds of expression of opinion." Id. at cmt. b. One is "the pure type," which "occurs when the maker of the comment states the facts on which he bases his opinion ... and then expresses a comment as to [a person's or organization's] conduct, qualifications or character." Id. The second kind is the "mixed type," which occurs when "an opinion in form or context, is apparently based on facts regarding [a person's or organization's] conduct that have not been stated by the [speaker] or assumed to exist by the parties to the communication." Id. As a result, a mixed type opinion "gives rise to the inference that there are undisclosed facts that justify the forming of the opinion expressed by [the speaker]." Id.
¶ 70 Comment c to section 566 adds that "[a] simple expression of opinion based on disclosed or assumed nondefamatory facts" — or an opinion of the "pure type" — is not itself sufficient for an action of defamation, "no matter how unjustified and unreasonable the opinion may be or how derogatory it is."
¶ 71 The trial court decided that three statements from the press conference — part of the first, all of the third, and all of the fourth — were protected opinions. To remind the reader:
• The first statement was: "For no pay whatsoever, [the nail technicians] have to clean the business, including the bathrooms, because [the employer] is simply too cheap to pay its workers the money they deserve."
• The third statement was: "It is time for businesses to quit financially exploiting women. Oppression of vulnerable workers remains all too common, and this is a particularly audacious case."
• The fourth statement was: "It's fairly common in industries that employ populations they think they can take advantage of, like women or immigrants."
And the third statement also appeared in the press release. We conclude that all of these statements were opinions protected by the First Amendment.
¶ 72 Looking at the first statement, the employer asserts that the phrase "too cheap" was based on allegedly false factual assertions and implications of false facts. But we agree with the trial court that an allegation that a person or a business is "cheap" is not a factual assertion; rather, it is a subjective and often hyperbolic term. Because this statement was directly connected with allegations in the complaint in the federal lawsuit, we conclude that no reasonable listener would consider the use of the term "cheap"
to be "anything but the opinion of the [speaker] drawn from the circumstances related" to the federal lawsuit. Chapin v. Knight-Ridder, Inc. ,
¶ 73 The third statement, meanwhile, contains emotionally charged, potentially hyperbolic language: "exploiting women," "oppression of vulnerable workers," "too common," and "particularly audacious." These terms reflect "the sort of ‘imaginative expression’ and ‘rhetorical hyperbole’ the [United States] Supreme Court has regarded as particularly worthy of constitutional protection." Keohane ,
¶ 74 Turning to the fourth statement, the comments about the employer being part of an industry in which it is "fairly common" to "take advantage of" populations such as "women or immigrants" directly reflect allegations in the federal lawsuit. See Restatement (Second) of Torts § 566 cmts. b & c. A reasonable person would, therefore, understand these statements as either conjectural or as Ms. Newman's personal observations and comments on those allegations. See id. ; see also Keohane ,
D. Summary Judgment
¶ 75 Before the trial court ruled on their motions to dismiss, the attorneys filed a motion alleging that they were entitled to summary judgment because their statements were true. The trial court did not rule on this motion, reasoning that it was moot because the court had granted the attorneys’ C.R.C.P. 12(b)(5) motion and dismissed the case.
¶ 76 Yet the attorneys now assert that we should grant the motion. We decline to do so because ruling on summary judgment motions in the first instance is the trial court's responsibility. See Colo. Pool Sys., Inc. v. Scottsdale Ins. Co. ,
¶ 77 We take no position on the merits of the attorneys’ summary judgment motion.
E. Attorney Fees
¶ 78 A party that successfully defends a trial court's decision to grant a C.R.C.P. 12(b) motion on appeal is entitled to recover reasonable attorney fees. State Farm Fire & Cas. Co. v. Weiss ,
tort of any other person," if the trial court dismisses the action "on motion of the defendant prior to trial under" C.R.C.P. 12(b), then the "defendant shall have judgment for his reasonable attorney fees in defending the action.").
¶ 79 The attorneys ask us to grant their request for attorney fees for defending the trial court's order. We decline this request because we are reversing the court's order dismissing this case and remanding the case for further proceedings.
IV. Conclusion
¶ 80 We affirm the trial court's determination that some of the statements that Ms. Newman made at the press conference — the second part of the first statement, the third statement, and the fourth statement — were opinions protected by the First Amendment.
¶ 81 We reverse the trial court's determination that the first part of Ms. Newman's first statement, her second statement, and one statement in the press release — "[The employer] forced [the nail] technicians to perform janitorial work without pay, refused to pay overtime, withheld tips, and shorted commissions" — were protected by the Noerr-Pennington doctrine, and we also conclude that those statements were not protected by the litigation privilege. As a result, we reverse the trial court's order dismissing this case.
¶ 82 We remand this case to the trial court to reinstate this case and to proceed accordingly.
JUDGE DUNN and JUDGE GROVE concur.