The Commercial Speech Exemption to the anti-SLAPP Statute.

In Simpson v. Gore, the California Supreme Court considered the commercial speech exemption to the anti-SLAPP statute.

 The defendant was a law firm who advertised for clients—people who had bought wood patio decks from the plaintiff.   The plaintiff’s advertisement was this:

Plaintiff, one of the companies named in the advertisement, sued for defamation and other business torts.  The law firm countered with an anti-SLAPP motion under CCP §415.16.  But plaintiff argued that the advertisement was “commercial” and therefore fell under the “commercial exemption” of the anti-SLAPP statute.

 The Cal. Supreme Court ruled the advertisement did not fit within the commercial exemption of the anti-SLAPP statute.  Therefore, the anti-SLAPP motion was granted; and the case was dismissed.

 The commercial exemption arises when: (1) the underlying cause of action (usually for defamation or unfair competition) is against a person engaged in selling or leasing goods or services; (2) the cause of action arises when that person represents facts about his or her business, or a competitor’s business; (3) the statement was made to promote his or her business; and (4) the intended audience for the statement or conduct meets the definition set forth in section 425.17(c)(2).

 The Cal. Supreme Court rejected the “commercial exemption” argument because (a) the law firm’s advertisement was not directed to a competitor; i.e., the plaintiff manufacturing company was in the business of selling wood decks and hardware, while the defendant was in the different business of practicing law; and (b) the advertisement did not actually make statements about the “products or services”—but rather just solicited clients who had used those products.

 In reaching this decision, the California Supreme Court affirmed that the burden of proof of showing the “commercial exemption” was on the plaintiff—the party trying to take advantage of the exemption.  The Court also explained that the exemption was to be narrowly construed.

 The Court saw the lawsuit as a “meritless suit brought primarily to chill the exercise of free speech or petition rights by the threat of severe economic sanctions against the defendant, and not to vindicate a legally cognizable right.”

 The Court also noted that, at the time the advertisement ran, the district attorney’s office was conducting an investigation into the risk posed by galvanized fasteners and connectors when used with these types of pressure-treated wood. The office ultimately issued a “Consumer Alert” warning of the corrosive effect of the new pressure-treated wood products “on the metal connector brackets typically used in construction.”

Prevailing counsel wasThomas R. Burke of Davis Wright Tremaine, San Francisco.