Defendant Michael Fitzgibbons appeals the trial court’s denial of his special motion to strike brought under the anti-SLAPP statute 1 (Code Civ. Proc., § 425.16). 2 Fitzgibbons contends an e-mail message he sent questioning the financial condition of plaintiff Integrated Healthcare Holdings, Inc. (IHHI), concerned a matter of public interest under section 425.16, subdivision (e)(4), and that IHHI failed to demonstrate a probability of prevailing on the merits of its claims for defamation, breach of contract, tortious interference, and violations of Business and Professions Code section 17200 et seq. We agree with these contentions and reverse the trial court’s order.
I
Factual and Procedural Background
In 2004, Tenet Healthcare Corporation sought to divest itself of a number of California hospitals it owned, including four in Orange County. Among those seeking to purchase the Orange County hospitals was IHHI, a holding company formed for this purpose. As its president concedes, IHHI is a “heavily debt leveraged” company “trying to develop sufficient cash flow to survive in a difficult healthcare market.” Because of concerns about fflOHI’s financial ability to operate the four hospitals, the County of Orange and the California Senate conducted public hearings on the proposed acquisitions.
Among the hospitals IHHI sought to purchase was Western Medical Center—Santa Ana (WMC), a 282-bed acute care facility and one of only three trauma centers in Orange County. WMC’s medical staff opposed IHHI’s acquisition of WMC due to concerns about both IHHI’s financial stability and its principal, Dr. Kali P. Chaudhuri, who had been involved in the failure of a previous healthcare company. One of the medical staff opposing IHHI’s purchase was Fitzgibbons, a member of the medical staff’s medical executive committee and WMC’s former chief of staff.
Under the heading, “Consideration,” the agreement provided: “The Parties further agree that this Agreement will be submitted to [the Department of Health Services] as part of the Hospital’s license application process. In consideration for the binding and enforceable commitments of IHHI, and in reliance upon these commitments, the Medical Staff of Western Medical Center—Santa Ana will express public support for the acquisition and operation of IHHI of, and issuance of hospital licenses to IHHI for, the Hospitals, in accordance with the commitments made herein, including being represented at any public hearings on this proposed acquisition and delivering to DHS (Mark Helmar) a letter supporting IHHI’s acquisition and licensure of the Hospitals.”
IHHI’s acquisition and licensing of the hospitals was completed in March 2005. On May 9, 2005, the lender on IHHI’s $50 million acquisition loan, and a $30 million nonrevolving working capital line of credit, served IHHI with a notice of default. The default was disclosed in IHHI’s filing with the Securities Exchange Commission (SEC), and reported in an article in the May 17, 2005, Orange County Register, which cited an analyst’s warning that IHHI needed to “find another investment partner ‘really quickly’ or the whole thing could be headed for bankruptcy court.”
Two days after the article appeared, Fitzgibbons sent an e-mail message to medical executive committee members and other individuals Fitzgibbons believed might offer financial assistance to the hospital, expressing concern IHHI could be headed for bankruptcy. The e-mail stated: “By the way, the hospital appears to be underwater and I don’t think IHHI can get an investor to pony up the $20 million, for the 60-70 million shares of stock which they are selling. Admissions are down 20%. They got a reduction of costs by dumping Tenet by 13%, and increased insurance payment of 7% (but that is neutralized by the factoring). Then their nursing salaries went up 8%—so they’re in the red. No way to get out. That is ominous. What would the buyer get buying IHHI stock? Control of IHHI, but not the land? Sounds like its going BK. Get ready, [f] Now, if the doctors had been in the deal. . . interest rates would have been better say 9%??, would have had our capital say $10
On June 23, 2005, IHHI filed a complaint against Fitzgibbons based on his May 19 e-mail message, seeking damages for (1) defamation; (2) intentional interference with a contractual relationship; (3) negligent interference with a contractual relationship; (4) breach of contract; (5) breach of the duty of good faith and fair dealing; and (6) violation of Business and Professions Code section 17200 et seq. The complaint alleges Fitzgibbons’s e-mail message was forwarded to Blue CrossAVellpoint, Inc., (Blue Cross), which had been negotiating with IHHI for higher insurance payments, and the e-mail message provoked concern on the part of Blue Cross, stalling negotiations. IHHI alleges this delay has cost it over $500,000.
Fitzgibbons filed a special motion to strike under the anti-SLAPP statute, which the trial court denied. Fitzgibbons now appeals.
n
Standard of Review
An order denying an anti-SLAPP special motion to strike is appealable under sections 425.16, subdivision (i), and 904.1. We review the order de novo.
(ComputerXpress, Inc. v. Jackson
(2001)
Ill
Discussion
A. Fitzgibbons Has Met His Burden of Demonstrating the May 19 E-Mail Message Concerned “an Issue of Public Interest”
The anti-SLAPP statute provides: “A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).) An act in furtherance of the right of free speech
The anti-SLAPP statute arose from the Legislature’s recognition that SLAPP suit plaintiffs are not seeking to succeed on the merits, but to use the legal system to chill the defendant’s first amendment right of free speech.
(Liu v. Moore
(1999)
To prevail on an anti-SLAPP motion, the movant must first make “ ‘a threshold showing that the challenged cause of action’ arises from an act in furtherance of the right of petition or free speech in connection with a public issue.”
(Varian Medical Systems, Inc.
v.
Delfino
(2005)
Section 425.16, subdivision (e), clarifies what speech is covered by the statute: “As used in this section, ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” Fitzgibbons contends his e-mail message falls within both clauses (2) and (4) of section 425.16, subdivision (e).
Citing
Zhao
v.
Wong
(1996)
“The definition of ‘public interest’ within the meaning of the antiSLAPP statute has been broadly construed to include not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity. [Citations.] ‘ “[M]atters of public interest . . . include activities that involve private persons and entities, especially when a large, powerful organization may impact the lives of many individuals.” ’ ”
(Damon v. Ocean Hills Journalism Club (2000)
IHHI also notes the public hearings on IHHI’s acquisition and operation of the four hospitals had ended months before Fitzgibbons sent the e-mail, making the issues involved in the hearings “moot.” IHHI asserts its SEC filing and newspaper article reporting on the lender’s default notice did not create a new public issue.
Du Charme
contrasted its situation involving union members with matters “of
-widespread
public interest,” providing as examples of the latter, increased traffic and natural drainage impacts of a proposed mall, a television show that generated considerable media debate, and issues concerning domestic violence and child molestation.
(Du Charme, supra,
We have no difficulty placing the financial survival of four hospitals within the county into the category of “widespread public interest,” and thus not subject to the “ongoing controversy” rule enunciated in Du Charme. 3 Thus, Du Charme provides no support to IHHI’s position.
In
Rivero,
a demoted supervisor sued former subordinates and a union over statements accusing him of abuse, theft, and extortion. The union contended its statements concerned an issue of public interest because they related to “ ‘abusive supervision of employees throughout the University of California
We have interpreted
Rivero
as outlining three general categories of cases falling within subdivision (e)(4) of section 425.16: “(1) The subject of the statement or activity precipitating the claim was a person or entity in the public eye. [Citations.] [][] (2) The statement or activity precipitating the claim involved conduct that could affect large numbers of people beyond the direct participants. [Citations.] [f] (3) The statement or activity precipitating the claim involved a topic of widespread public interest. [Citations.]”
(Commonwealth Energy Corp. v. Investor Data Exchange, Inc.
(2003)
Finally, IHHI contends the anti-SLAPP statute does not apply to the challenged e-mail because Fitzgibbons was IHHI’s competitor, and therefore the e-mail fell into the category of unprotected commercial speech.
4
Specifically, IHHI introduced evidence that Fitzgibbons belonged to an entity called Western Medical Center Acquisition, LLC (WMCA), formed to purchase WMC. Tenet Healthcare rejected WMCA’s offer, and later accepted IHHI’s. In support of its argument, IHHI relies on
MCSi, Inc. v. Woods
(N.D.Cal. 2003)
In
MCSi,
a federal court formulated a rule that statements by a commercial competitor about the competition are not matters of public interest.
(MCSi, supra,
Further, to the extent Fitzgibbons’s activities with WMCA prior to IHHI’s purchase of the hospitals made him IHHI’s competitor, this competition ended when Tenet accepted IHHI’s offer, months before Fitzgibbons sent the e-mail. Moreover, Fitzgibbons’s membership in the medical staff’s medical executive committee at WMC does not make him a “competitor” of IHHI. (See
Redding v. St. Francis Medical Center
(1989)
Because we conclude the challenged e-mail manifestly concerned a public issue, we need not decide whether it concerned an issue under consideration or review by a legislative, executive, or judicial body, under section 425.16, subdivision (e)(2).
B. IHHI Has Not Established a Probability of Prevailing on Any of Its Claims
Having determined Fitzgibbons met his burden of demonstrating his e-mail message fell within the anti-SLAPP statute, the burden now shifts to IHHI to demonstrate a probability of prevailing on its claims.
1. Defamation
Civil Code section 45 provides: “Libel is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.” Fitzgibbons contends his May 19 e-mail message is not actionable because it consists of only his opinion, and not factual assertions. IHHI, on the other hand, asserts that opinions and criticism may be actionable even though they are based on true statements of fact. Neither paints an accurate picture of the law.
In determining whether disparaging remarks are actionable defamation, “ ‘the question is not strictly whether the published statement is fact or opinion . . . [r]ather, the dispositive question is whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.’ [Citation.]”
(Ruiz, supra,
An expression of opinion based on express facts would be: “ ‘ “[Jones] moved in six months ago. He works downtown, and I have seen him during that time only twice, in his backyard around 5:30 seated in a deck chair . . . with a drink in his hand. I think he must be an alcoholic.” [Citation.]’ [Citation.] This opinion disclosed all the facts on which it was based and did not imply there are other, unstated facts supporting the belief Jones is an alcoholic. The opinion that Jones ‘ “must be an alcoholic” ’ is actionable only if the disclosed facts are false and defamatory. ‘A statement of opinion based on fully disclosed facts can be punished only if the stated facts are themselves false and demeaning.’ [Citation.] The rationale for this rule is that ‘[w]hen the facts underlying a statement of opinion are disclosed, readers will understand they are getting the author’s interpretation of the facts presented; they are therefore unlikely to construe the statement as insinuating the existence of additional, undisclosed facts.’ [Citation.] When the facts supporting an opinion are disclosed, ‘readers are free to accept or reject the author’s opinion based on their own independent evaluation of the facts.’ [Citations.]”
(Franklin, supra,
When determining whether a statement of opinion is actionable “we examine the totality of the circumstances, starting with the language of the allegedly defamatory statement itself.”
(Ruiz, supra,
In its brief, IHHI argues that Fitzgibbons bears the burden of proving the truth of the statements in his e-mail message, and that “[t]his burden is shifted to the plaintiff
only
if the plaintiff is a public figure, which in this case, IHHI is not.” For this proposition, IHHI cites
Philadelphia Newspapers, Inc.
v.
Hepps
(1986)
In challenging the e-mail’s assertion that “[a]dmissions are down 20%,” IHHI cites two one-page reports covering, respectively, April and May of 2005. These reports purport to show the number of inpatient and outpatient surgeries performed, and the revenues generated from them. IHHI asserts these reports show WMC to be above budget for these two months. This evidence fails to establish the challenged statement is false.
Specifically, IHHI provides no evidence of how the budget was created or its relation to past events. Indeed, IHHI may have adjusted its budget prior to the reports to take into account a 20 percent drop in admissions. Moreover, the reports relate only to revenues received from surgeries; unless all patient
Moreover, even if we were to construe the e-mail’s assertion that IHHI is going bankrupt as implying undisclosed facts, it would still not constitute actionable libel because IHHI has failed to provide competent evidence that it was not headed toward bankruptcy at the time Fitzgibbons sent his e-mail. The reports cited by IHHI show only the revenue from surgeries from one hospital for two months, but fail to provide any information on expenses, cash flow, assets, debts, etc. In addition to the reports, IHHI also cites a financial statement IHHI filed on June 8, 2005, as evidence it was not close to bankruptcy. IHHI’s brief, however, does not cite to any particular part of the filing and, based on our review of the document, we discern nothing germane to IHHI’s potential for declaring bankruptcy at the time it was filed. 6
We are inclined to allow the plaintiff in a SLAPP motion a certain degree of leeway in establishing a probability of prevailing on its claims due to “the early stage at which the motion is brought and heard [citation] and the limited opportunity to conduct discovery [citation].”
(Wilcox v. Superior Court
(1994)
Having concluded IHHI failed to demonstrate anything in the e-mail’s first paragraph constitutes actionable liable, we now turn to the second, which reads: “Now if the doctors had been in the deal. . . interest rates would have been better say 9%??, would have had our capital say $10 million, and admissions would have been even. Result happiness. Sad.” IHHI does not contend any of the factual assertions in this paragraph are false. Accordingly, it is not actionable defamation.
Finally, the e-mail’s last two paragraphs read: “It might work if they came to us on hands and knees and gave us the stock in exchange for our telling the world we support them, and get a refinance at a better rate??? Who would lend? Ligón’s the CFO’s family supposedly has money. [][] The loan default is classic ‘chaudhuri.’ I guess Mr. Mogel won’t be pooling [szc]
2. Breach of Contract/Breach of Covenant of Good Faith and Fair Dealing
IHHI contends Fitzgibbons waived his right to complain about IHHI’s operation of WMC when he executed the agreement between the medical staff and IHHI, and that his e-mail message therefore breached the contract. We disagree.
“ ‘ “A waiver of First Amendment rights may only be made by a ‘clear and compelling’ relinquishment of them. . . .” [Citation.] “Moreover, it is well established that courts closely scrutinize waivers of constitutional rights, and indulge every reasonable presumption against a waiver.’ [Citations.]” ’ ”
(People ex rel. Lockyer v. R.J. Reynolds Tobacco Co.
(2003)
The clause IHHI relies upon reads: “[T]he Medical Staff of Western Medical Center—Santa Ana will express public support for the acquisition and operation of IHHI of, and issuance of hospital licenses to IHHI for, the Hospitals, in accordance with the commitments made herein, including being represented at any public hearings on this proposed acquisition and delivering to DHS (Mark Helmar) a letter supporting IHHI’s acquisition and licensure of the Hospitals.” (Italics added.) IHHI provides no evidence demonstrating the medical staff did not fulfill their requirements to express support at the hearings on IHHI’s acquisition of the hospitals, or send a letter to the Department of Health Services supporting IHHI. Rather, IHHI contends the legal staff’s promise to “express public support for the acquisition and operation of IHHI” prohibited Fitzgibbons from making any negative comments during the three-year term of the agreement.
As an initial matter, we note that Fitzgibbons did not send out his e-mail message publicly, but only to a limited number of recipients. Accordingly, the e-mail did not violate the express provisions of the agreement. More importantly, however, the phrase “express public support for the acquisition and
Indulging every reasonable presumption against a waiver of First Amendment rights, we conclude IHHI failed to demonstrate a reasonable probability of prevailing on its breach of contract cause of action. Similarly, because courts will not imply a waiver of free speech rights, IHHI’s cause of action for breach of the implied covenant of good faith and fair dealing must also be stricken.
3. Interference With Contract
IHHI alleges Fitzgibbons’s e-mail was forwarded to Blue Cross during the time IHHI was attempting to renegotiate an increase in rates with Blue Cross. IHHI provided evidence that Blue Cross expressed concern about IHHI’s financial condition after receiving the e-mail, and due to that concern delayed executing a contract for higher rates. IHHI contends this delay has resulted in damages exceeding $500,000.
Establishing a prima facie case of intentional interference with contractual relations requires proof of “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.”
(Pacific Gas & Electric Co.
v.
Bear Stearns & Co.
(1990)
In support of this claim, IHHI cites the declaration of Mario Rodriguez, a business consultant negotiating with Blue Cross on IHHI’s behalf for higher rates. The declaration does not state who forwarded Fitzgibbons’s e-mail message to Blue Cross, and IHHI presented no evidence demonstrating Fitzgibbons intended to send, either personally or through an agent, the e-mail to Blue Cross. The only evidence IHHI cited concerning intent are the disparaging remarks Fitzgibbons made in his e-mail and Fitzgibbons’s mem
We recognize the evidence may support an inference of “ ‘culpable intent from conduct “substantially certain” to interfere with the contract [or prospective economic relationship].’ ”
(Savage v. Pacific Gas & Electric Co.
(1993)
In addition to protection against acts intentionally designed to interfere with contractual relations, the law also protects against injury caused by negligence.
(J’Aire Corp. v. Gregory
(1979)
Finally, we note IHHI’s interference with contract claims also fail because it presented no evidence demonstrating any breach or disruption of its existing contract with Blue Cross. Instead, IHHI demonstrated interference with its negotiations for a new Blue Cross contract. Thus, the wrong of which IHHI complains is interference with prospective economic advantage, a tort not pleaded in its complaint. Even if it had been pleaded, however, IHHI failed to establish the interference was wrongful apart from the interference itself, a required element of that tort.
(Reeves v. Hanlon
(2004)
4. Unfair Business Practices Act, Business and Professions Code Section 17200
IHHI seeks injunctive relief under the Unfair Business Practices Act, Business and Professions Code section 17200. This cause of action arises out of Fitzgibbons’s alleged defamation of IHHI in his e-mail message. Because we conclude the message did not constitute actionable defamation, IHHI’s action for violation of the Unfair Business Practices Act also fails for this reason.
Disposition
The order denying Fitzgibbons’s special motion to strike is reversed, and the trial court is directed to enter a new order granting the motion in its entirety. Fitzgibbons is entitled to his costs on appeal.
Rylaarsdam, Acting R J., and Fybel, J., concurred.
Notes
SLAPP is an acronym for strategic lawsuit against public participation, first coined by two University of Denver professors. (See Comment, Strategic Lawsuits Against Public Participation: An Analysis of the Solutions (1990-1991) 27 Cal. Western L.Rev. 399.)
Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure.
Moreover, even if we applied Du Charme’s “ongoing controversy” rule, the e-mail would still relate to an issue of public concern. Although IHHI’s acquisition itself may have been a dead issue when the e-mail was sent, the body was not yet cold. The public hearings and articles centered on IHHI’s financial ability to operate the hospitals and the impact IHHI’s failure would have on the public’s access to health care. The default, touching squarely upon IHHI’s financial health, occurred just two months after IHHI’s acquisition of the hospitals, and was the immediate subject of a newspaper article. Fitzgibbons’s e-mail message just two days after the article’s publication was not remote in time.
In making this argument, IHHI notes the e-mail was sent to only a small number of people. As we recognized in
Ruiz
v.
Harbor View Community Assn.
(2005)
Globetrotter
reasoned: “The Court has been unable to locate any California cases concluding that the ‘issue of public interest’ test is met by statements of one company regarding the conduct of a competitor company. If such statements were construed as coming
We deny Fitzgibbons’s request for judicial notice of a Los Angeles Times newspaper article.