SAN FRANCISCO (CN) — A California appeals court handed free-speech advocates a tepid victory Wednesday, reviving a tech company’s libel lawsuit against anonymous employees and a job-hunting website where they posted critical comments.
A state judge had dismissed software company ZL Technologies’ lawsuit, for failure to serve seven Doe defendants who posted the reviews about ZL, and a motion to compel compliance with a subpoena that ZL served on Glassdoor Inc., seeking the reviewers’ identities and contact information.
ZL claims the anonymous reviewers defamed it on Glassdoor’s website, and wants their identities so it can sue them. It sued Glassdoor and Does 1-7.
In reversing Wednesday, a three-judge panel of California’s First Appellate District found that the reviews included false assertions of fact, which are not constitutionally protected speech.
“Although statements of fact may be actionable as libel, statements of opinion are constitutionally protected,” Acting Presiding Justice Maria Rivera wrote for the panel. “That does not mean that statements of opinion enjoy blanket protection. On the contrary, where an expression of opinion implies a false assertion of fact, the opinion can constitute actionable defamation.”
Between 2010 and 2012, seven people calling themselves current or former ZL employees posted anonymous reviews on Glassdoor slamming ZL’s management and work environment.
ZL sued the seven Does in August 2012 for libel and online impersonation, claiming that they were not actually employees. The next month, ZL subpoenaed Glassdoor for records revealing the defendants’ identities.
Glassdoor balked, saying the reviews were constitutionally protected opinion exempt from libel claims, and that ZL had to make a prima facie showing that the statements were libelous before it could compel disclosure.
Marin County Superior Court Judge Mark Talamantes denied ZL’s subsequent motion to compel Glassdoor to hand over the records, finding that the reviews were protected opinion.
A year later, Talamantes dismissed with prejudice after ZL failed to identify and serve the defendants.
On appeal, ZL said Talamantes erred because the reviews contained direct and implied false statements of fact that are not constitutionally protected.
ZL also said Talamantes erred by dismissing for failing to serve the reviewers, since his previous denial of its motion to compel had prohibited it from identifying them.
Siding with ZL, the appellate panel Wednesday ruled that a plaintiff like ZL must make a prima facie showing that a libelous statement was made in order to compel disclosure of a speaker’s identity, citing Krinsky v. Doe 6, a 2008 ruling from the California Court of Appeal, Sixth District. ZL had asked the court to find that a prima facie showing is sufficient for that purpose.
But the panel declined to also require a balancing test established in Dendrite International, Inc. v. Doe No. 3, a 2001 ruling from New Jersey Superior Court. That test weighs a defendant's First Amendment rights against the strength of a plaintiff’s case.
The request to require the balancing test was made by Twitter and Public Citizen, which filed a brief as amici curiae in support of Glassdoor.
“Whether or not the defendant bears the burden of proving falsity in a particular action, the constitutional protections weigh in favor of requiring the plaintiff to make a prima facie evidentiary showing of the elements of defamation, including falsity, before disclosure of a defendant's identity can be compelled,” Rivera wrote for the panel.
Twitter and Public Citizen argued that applying the balancing test would help anonymous defendants show that disclosure of their identities could expose them to job-related retaliation.
But ZL maintained that applying a balancing test could harm plaintiffs by preventing a case from proceeding even after making such a prima facie showing.
The panel agreed with ZL. It reversed and remanded with orders to vacate the denial of the motion to compel.
“A plaintiff can be required, at the outset, to ‘demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited,’” Rivera wrote, citing Jarrow Formulas, Inc. v. LaMarche, a 2003 ruling from the California Supreme Court. “We think the same prophylactic conditions are an appropriate and measured counterbalance to a defendant speaker's constitutional rights to privacy and anonymous speech.”
Despite the panel's balancing-test finding, Glassdoor said Thursday it was “pleased the court has broadened evidence requirements for plaintiffs seeking to unmask anonymous speakers.”
“We are committed to protecting the First Amendment rights of our users to post anonymous reviews about their workplace experiences and opinions without fear of retaliation,” the company said in a statement. “We are continuing to fight on our members’ behalf for protected free speech in this and other cases.”
ZL Technologies was represented by James Wagstaffe with Kerr & Wagstaffe in San Francisco; Glassdoor by William Frimel with Seubert French Frimel & Warner in Menlo Park. They did not return requests seeking comment.
Concurring with Rivera were Associate Justices Timothy Reardon and Jon Streeter.
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