DEFENDANT DELFINO'S REPLY BRIEF IN SUPPORT OF HIS SPECIAL MOTION TO STRIKE THE THIRD AMENDED COMPLAINT
"INTRODUCTION
Despite the abundance of uncontroverted evidence that these defendants have already submitted to the court showing that this lawsuit is just a SLAPP suit, plaintiffs continue to claim otherwise, but yet submit no evidence contradicting the fact that Varianís split up was a matter of public interest, that the CUIAB appeal and hearing process was a governmental action that protects free speech by CCPß425.16(e)(2), and that the postings made by defendants since February 26, 1999 involve commenting and reporting on this litigation. All are activities protected by CCPß425.16.
This case is about free speech and the Legislatureís expressed public policy concerns of protecting first amendment rights. At some point, the court needs to step back from the legal elements of these special motions to strike to see this case for what it truly is - - - a SLAPP suit.
Citizens would be chilled from addressing public issues or commenting upon legislative, administrative or judicial proceedings or issues for fear of being sucked, as here, into a Fortune 500 corporation's SLAPP suit.
These corporations have no valid claims - - - they were essentially, if not unequivocally, knocked out in the federal court - - - and they are just using their two employee-plaintiffs to try to disguise the fact that it is the corporations who are actually calling the shots - - - all designed to economically bankrupt, or judicially restrain, defendants from exercising their first amendment rights.
THESE ANTI-SLAPP MOTIONS ARE TIMELY
Plaintiffs argue that the motion is untimely in as much as they originally filed their lawsuit on February 26, 1999. What plaintiffs conveniently ignore, however, are:
1. Both Anti-SLAPP motions were timely filed within 60 days of the filing of the 3rd Amended complaint.
2. Because plaintiffs filed groundless federal claims in their original complaint, defendant had to spend 14 months in federal court gathering sufficient evidence to have the federal court give defendant summary judgment on those federal claims. Any delay in bringing this motion in the State court has been created by Plaintiffs and their overzealous pleading of nonexistent federal claims.
3. Moreover, immediately upon their appearance in Superior Court after the remand, plaintiffs advised this court that they were going to file an amended complaint. Defendants objected, but plaintiffs were permitted to file their Third Amended Complaint.
4. Because this case was removed to federal court within 30 days of its filing, this defendant has never filed responsive pleading in Superior Court to any of plaintiffsí complaints. The present Anti-SLAPP motions and demurrers are the first attacks by these defendants against plaintiffsí lawsuit in the Superior Court.
5. The legislative mandate is for the Anti-SLAPP statute (CCPß425.16(a)) to be "construed broadly." This has been interpreted to means that the motion must be filed within 60 days "of the most recent amended complaint." Globetrotter Software Inc. v. Elan Computer Group Inc. (Sept. 1999) 63 F. Supp.2d 1127, at 1129. There is no reason that should not apply here, especially since it is plaintiffs' bogus federal claims that resulted in the case being removed to federal court in the first place.
6. There is no "demurrer" procedure in federal court. (which plaintiffs reluctantly admit)
7. The ability to file a California-style Anti-SLAPP motion in federal court was not recognized and finalized until October 1999 when the U.S. v. Lockheed appeal became final. By that time, this case had already been in federal court for seven or eight months.
8. Judge Whyte had already issued a preliminary injunction in the case, albeit directed at ìcommercial speechî issues, and based on Judge Whyteís refusal to let Mr. Delfino testify against granting of an injunction by way of his [Delfinoís] declaration in opposition to the motion for preliminary injunction.
9. The time spent before the federal court was, now, as if it never happened. Thatís because the District Court concluded it was without jurisdiction in the first place; remanding the case back to the Superior Court.
10. The Ninth Circuit Court of Appeals has recently agreed with defendants that once the district court determined that it was without subject matter jurisdiction, the preliminary injunction dissolved also.
11. Likewise, all of the District Courtís rulings entered without subject matter jurisdiction are a nullity, void, and dissolved also.
12. There is absolutely no prejudice to plaintiffs as they have only benefitted by their being permitted to have almost 20 months of conducting civil discovery in this case, and they should, therefore, be ready to submit detailed factual evidence why their case should not be dismissed as being a SLAPP suit.
13. Shortly after the case was remanded, Defendants asked plaintiffs' counsel to stipulate that the federal injunction no longer existed. Plaintiffs refused to stipulate or concede that the preliminary injunction entered by the federal court was void and dissolved once the federal claims were dismissed by the District Court and the case remanded to the Superior Court. Plaintiffs forced defendants to pursue their appeal to the 9th Circuit on the status of that injunction. The 9th Circuit ruled in defendants' favor, holding that the injunction dissolved as a matter of law upon remand. The present Anti-SLAPP motions were filed withing 60 days of the 9th Circuitís decision. Therefore, until the 9th Circuit entered its decision (and plaintiffsí amended their complaint), it was futile to make a SLAPP motion because plaintiffs would argue either that the issue was still up on appeal (and therefore this court was without jurisdiction to rule on issues affecting the purported preliminary in junction) or that because the injunction was still in place, it arguably demonstrated that plaintiffs likely would ultimately prevail (even though the federal court refused to consider the testimony of Delfino opposing the motion for injunction, and that it was based on "commercial speech" issues which were later defeated by Delfino when the court ruled there was no commercial competition by Delfino.).
For these reasons, Plaintiffs have no basis for claiming these motions are untimely. If they had a case, which they don't, they should have gotten it together by this time, 20 months and four complaints later. Plaintiffs' haven't, and the motions to strike under ß425.16 should be granted against both the corporate and individual plaintiffs in favor of both defendants, with an award of reasonable fees and costs.
IF IT LOOKS, WALKS, AND SQUAWKS LIKE A SLAPP SUIT, ITíS A SLAPP SUIT.
Considering that they have had almost two years of civil discovery to marshal evidence to support their claims, plaintiffs now fail to produce any credible or admissible evidence to support their assertion that theirsí is anything but a SLAPP suit. Plaintiffs continue to confuse and embellish their claims, but fail to support any of them.
For instance, at page 4, lines 22 -23 of their opposition brief, plaintiffs assert that there are postings that imply the two individual plaintiffs are having a sexual affair. Plaintiffs then cite numerous paragraphs and subparagraphs from their 3rd Amended Complaint. However, plaintiffs have conveniently failed to identify either the aliases or true authors of those postings1, and more importantly, produce no admissible evidence that either of these two defendants are in any way connected with those cited postings. Those posting were not made by these defendants, and there is absolutely no evidence that they were. As Judge Whyte admonished these plaintiffs and their counsel, they just embellish the facts instead of accurately stating them.
PUBLIC STOCK CORPORATION, PUBLIC ANNOUNCEMENT OF CORPORATE SPLIT, PUBLIC INTERNET FORUM DISCUSSIONS
Plaintiffs have no argument, other than to deny, that Varian was a publically held and traded corporation, attempting, in late 1998 and early 1999, to obtain IRS and shareholder approval of a split-up of the publically announced and newsworthy stories that the corporation was dividing into three new entities, and that this news was the subject of public interest on a Yahoo Internet message board that is open to the public. They claim that this is somehow not of interest to the public, or a public issue. Plaintiffs simply ignore the true facts. Amazing!
What was really happening is that corporate management had managed to award themselves a series of ìgolden handshakesî which depended upon the split going through. Any opposition or public inquiry, or ridicule, of that proposed split up was targeted for suppression. An example of these handshakes can be found on the Yahoo! Internet stock pages for VSEA, whose president is Richard Aurelio. According to the insider trading page, Mr. Aurelio has engaged in numerous stock transactions of his stock-option "handshake," to the tune of his selling almost 600,000 shares and receiving income of more than $32,000,000 just since the company split.(a copy of those "Insider Trading" pages are attached to Glynn Falconís declaration as Exhibit A).
Varian argues that none of the posting theyíve listed in their complaint relate to the corporate split-up. That is cute phraseology. Mr. Delfino posted 60 messages (Delfino decl., Exhibit D) before the lawsuit was filed on February 26, 1999. The corporate split did not finalize until April 2, 1999. Each of those posting are on the Yahoo stock message board for Varian. They each discuss the layoffs, the relocations, the downsizing, the lack of corporate leadership, the profitability of certain product directions, falling stock prices, etc. All 60 posting were public discussions of a public issue, the future profitability and direction of the company following the split-up. While the split may not have been specifically mentioned in each of the postings (take messages 529 where the "break-up" is discussed, or #649 dated 1/22/99 discussing "I canít see the existing management able to really make three new successful companies when they are only motivated by greed.," o r #686 dated 2/1/99 "please share with us which one of the three new companies is going to do well ..", and see messages 700 and 727 posted just before the SLAPP suit was filed.), they must be read in the context of what was going on in the forum discussions about peoples concerns overs the publically announced split of the company.
Plaintiffs have failed to produce any evidence to show that this defendant did anything other than speaking his mind about the effects of the upcoming company split-up and the pending allegations before the EDD and CUIAB hearing where the accusations made by plaintiffs Felch and plaintiff Zdasiuk were primary issues to be tried.
PLAINTIFF ARE NOT GOING TO PREVAIL ON THE MERITS
Although they argue otherwise, their track record in this case shows that plaintiffs cannot prevail on the merits.
First, they lost the contested issues before the CUIAB of whether or not Delfino acted harassingly toward Felch and Zdasiuk. Varian lost the administrative hearing. That is a fact.
Second, the corporate plaintiffs have no viable claims - - - period. They lost their unfair competition and false advertising claims by way of summary judgment in federal court. While plaintiffs are struggling mightily to make some sort of distinction to their ìCaliforniaî unfair competition and false advertising claims, the ever present fact is that they have presented no evidence of any such violations. Moreover, issue preclusion will defeat their attempt to relitigate those facts in the Superior Court. The corporate plaintiffs lost in federal court. That is a fact. They will lose again in Superior Court.
Third: The improperly granted preliminary injunction in federal court was recently corrected by the Ninth Circuit. The plaintiffs, both corporate and individual, lost that appeal wherein they had contended that the preliminary injunction was properly granted. So all plaintiffs have lost before the Ninth Circuit. That is a fact.
Fourth: Plaintiffs, nor any of them, have failed to obtain any ruling in the Superior Court that they might somehow prevail on the merits. They have not applied for a preliminary injunction. Theyíve let the federal TRO lapse. They have not pursued injunctive relief before this court. If they did, they know that they would lose again because they do not have, nor can they produce, any admissible evidence (even after 20 months of litigation and discovery) that would indicate this defendant has done anything civilly wrong. Plaintiffs have not produced one witness or one piece of evidence that any member of the public has understood any Internet posting to be defamatory. Plaintiffs have not produced one bit of evidence that any plaintiff has suffered any damage, much less special damages. Plaintiff Zdasiuk as claimed injury to his occupation, but even that is not provable because he was recently promoted to vice-president with Varian2. And that is a fact. (See Exhibit B to Glynn Falconís declaration)
Fifth: Plaintiffs now claim to have "lost" the five weeks of bathroom videos which they took of Delfino trying to obtain evidence of him "harassing" plaintiff Felch. BAJI 2.02 and 2.03 will address their failure to produce this evidence, almost guaranteeing another loss for plaintiffs at trial.
POSTINGS ARE STATUTORILY AND CONSTITUTIONALLY PRIVILEGED
Nothing in the admitted 60 postings preempts them from First Amendment and Civil Code 47(b) and (c) protection. There is no evidence of any "malice" by these defendants that would take it outside of the privileges. Plaintiffs tacitly admit that the message boards are read by persons who have a direct and immediate interest in the affairs of the corporate plaintiffs and their employees (the two individual plaintiffs). Both defendants have been deposed for at least three to five days, and there is not one shred of evidence that they have any personal animosity towards these plaintiffs (although they have repeated the request that these plaintiffs just let them alone). There is not one non-party witness that has come forward to suggest any "malice" exists from defendants towards plaintiffs.
Their complaint is standard SLAPP innuendo and hyperbole, and it should be seen for what this lawsuit really is. The motion to strike should be granted.
THE CUIAB HEARING IS A QUALIFYING ADMINISTRATIVE HEARING WHICH IS COVERED BY CCPß425.16(e)(2)
Plaintiffs do not deny that the EDD and CUIAB proceedings are qualifying governmental actions for protection from SLAPP suits under CCPß425.16(e)(2), they just argue that the outcome is not binding upon them. So what? The truth is that Varian attacked Delfinoís application for benefits on the ground that he had harassed Felch and Zdasiuk. The ALJ took evidence from both sides on the issue, and she found there were no facts supporting the truth of Felchís allegations, and found in favor of Delfino. Delfino has posted that he did not make face or phone gestures at Felch. That is the truth. The only one to ever say otherwise is Felch. She has five weeks of secret videotapes of Delfino going to the menís room, yet not one bit of that evidence supports her accusations. Now plaintiff claims to have lost the tapes! Having won at the CUIAB, any posting by Delfino that the accusations of Felch or Zdasiuk were false or lies, was wholly supported by the ALJís decision. Delfino would not have been awarded benefits if he had been found by the ALJ to have harassed plaintiffs.
Plaintiffs would have this court rewrite that history and say that it did not happen. Obviously, CUICß1960 was not enacted in contemplation of SLAPP motions. It was enacted during the hay days of WT litigation when half hour CUIAB hearing became marathon mini-WT trials, devouring the resources and avail time of the CUIAB. In order to thwart that tactic, section 1960 was enacted. It has no application in SLAPP litigations, and its restrictions should not apply in this case This is not a WT case. It further no purpose and undermines the administrative process and the ability of private citizens to be vindicated from employers' wrongful allegations.
The truth is that the CUIAB proceedings were undeniably protective of free speech by Delfino on the message boards. Per CCPß425.16(e)(2) the special motion to strike the complaint should be granted.
PLAINTIFFS ARE USING INNUENDO, NOT FACTS TO TRY TO WIN THIS LAWSUIT
Ms. Hermle, counsel for plaintiffs, makes an incredible statement at page 10, line 27 -28 of SLAPP opposition brief - - - she claims to be telling "the truth" that Delfino posted more than 60 Internet messages before February 26, 1999. She claims that there are some similarities in the postings made by other aliases, such as "go_get_help," etc. She has no factual basis for claiming that to be "truth." When she filed the complaint on February 26, 1999, she also claimed it was the truth that postings by these other aliases (such as "bite me now," "Lickamea," "ernesto," "giveemdx," "ramrodfishguts" and "FSUfanNorCal" were also "defamatory" postings by Delfino. What Hermle fails to reveal to this court is that they were not. She was wrong! Those so-awful postings and their aliases have quietly disappeared, without explanation, in the Third Amended Complaint (compare paragraph 23 of the original complaint with its current counterpart, paragraph 31, of the third amended complaint.) Where oh where have these awful co-conspirators gone? Ms. Hermle knows the truth, and the truth is that these are not postings by Dr. Delfino. But she won't allow her clients to admit to that for fear of losing the case (Plaintiffs offered only objections, no answers, to the 97 interrogatories recently asked of them, and which explore why those posters are no longer in the suit.). Bad faith tactics? Yes. The lawsuit is a SLAPP suit, and it should be stricken.
DELFINO DID NOT IMPERSONATE FELCH OR ZDASIUK ON THE INTERNET
Plaintiffs claim that on May 5 and May 18, 1999, defendants posting messages on StockTalk message boards using Kinko's computers. They claim to have videotape from store surveillance camera to that effect. They showed excerpts to the federal court before defendants could conduct any discovery regarding the truth of those assertions. Without any authenticating evidence about the videotapes, the federal court improperly held Delfino in contempt of the federal courtís preliminary injunction3.
However, once defendant was permitted to conduct discovery about the tapes, it was determined that the imprinted date and time stamps for the critical time periods were just not anywhere near accurate. No one can authenticate the actual accuracy of the time and date stamps, and Kinkoís own expert witness (Rollings) stated that it was a 50-50 proposition of whether the clock was even within one hour of being correct. Moreover, the original videotapes cannot be authenticated by Kinko's, and plaintiffs have utilized the tapes for their own purposes, without letting defendant view the original tapes, making excerpts of only the scenes and purported times that plaintiff wanted. These and other pertinent objections to those videotapes, and any conclusions attempted to be derived therefrom, are more fully set forth is the separately stated objections to Plaintiffsí Exhibits CC and DD filed concurrently herewith.
The net result is that the proffered videotapes excerpts are evidentiary bankrupt of admissible evidence as to time, date and manner. Interestingly, Plaintiffs admittedly grabbed about 8 videotapes from Kinkoís corresponding to dates of alleged postings, but claims it only found defendant on two of those. That means that it is someone else, not these defendants, who may have used Kinkoís computers to post on the StockTalk message boards. Delfino, and Day, have unequivocally testified, time after time, before and after the federal court contempt ruling, that they did not make the Felch or Zdasiuk postings on StockTalk. There is absolutely no credible or admissible evidence that they did4 The special motion to strike the complaint should be granted.
PLAINTIFFS BROUGHT THIS LAWSUIT AGAINST DEFENDANT TO STOP HIM FROM POSTING
If there was ever any doubt about the true motivation behind plaintiffs filing this lawsuit, one only has to look at plaintiffsí demand made early-on in the case. On April 5, 1999, plaintiffs faxed a letter to defense counsel in which plaintiffs stated they would drop all of their other claims if defendant would consent to a preliminary injunction prohibiting him from posting on the Internet about plaintiffs. Of course, by the time of that letter, the corporation had just finished its split into three new entities on April 2, 1999, and the CUIAB decision had become final. Plaintiffs had, through the Superior Court TRO, gotten what they wanted - - - defendantís silence on the Internet. (A true copy of that 4/4/99 letter is attached to the declaration of Glynn Falcon as Exhibit C). They had no interest in going further with the SLAPP against this defendant, other than to keep him silent in the future.
The First Amendment is too precious a right to let it be subservient to these corporations and their financial might. The motion to strike pursuant to CCPß425.16 should be granted.
CONCLUSION
There shouldn't be any doubt that the corporate plaintiffs have filed a SLAPP suit, using two high-ranking employees to disguise the true SLAPP nature of the case. While defendant maintains that the entire complaint should be stricken as to all of the plaintiffs, if the court has even the least bit of hesitation because of the individual claims, then the motion should be granted at least as to the two corporate plaintiffs, Varian Semiconductor and Varian Medical. So in the alternative, defendant requests that the motion be granted and the two corporate lawsuits be stricken in this case. Fees and costs are requested pursuant to later filed submissions after the courtís ruling on the anti-SLAPP motions.
It is respectfully submitted this date of October 23, 2000.
Glynn P. Falcon Attorney for Michelangelo Delfino"
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