(CN) - A federal judge in Los Angeles dismissed a defamation lawsuit at the request of a talent studio called "The," which had accused BizParentz Foundation and co-founder Anne Henry of labeling it a scam. Henry called the voluntary dismissal a "victory for our Constitution and the rights we all have to speak the truth."
"We believe the plaintiffs voluntarily dismissed because they knew their case had no merit," said Henry, co-founder of the nonprofit charity for families of children in the entertainment industry.
Plaintiffs NedGam Productions and Edge 1 Productions operate the "The" talent studio for child models and actors, and the Phoenix-based Academy of Cinema and Television (ACT), respectively.
"The" and ACT have held auditions at hotels nationwide, according to BizParentz, and "have been the subject of over 40 national news reports."
NedGam and Edge 1 accused BizParentz and Henry of launching an "unlawful smear campaign against ACT, and later The, designed to malign and impugn ACT's and The's respective reputations and goodwill."
Henry allegedly posted a message on backstage.com, stating that ACT was run by the "same crew" as the Pacific Modeling and Acting Academy (PMAA), "who skipped out with over $1M from Tampa ALONE last month" without providing the services it promised.
The March 2009 lawsuit also took issue with an article titled "Aspiring Child Actors Face Biggest Money Scam in History," posted on BizParentz's website, which allegedly "contains various false and misleading statements about ACT." Though the article focused on the PMAA, it targeted ACT as the "next big scam," according to the lawsuit.
Henry allegedly told Pittsburgh reporters that ACT is "scammy" and is designed to bilk parents of child stars for thousands of dollars.
When asked for proof, she reportedly said, "I kind of don't need to be able to prove it to warn people. Even if they don't run with the money, it's still a bad business deal."
Henry's allegedly defamatory statements, including claims that "The" was under FBI investigation and had a "less than stellar rating" with the Better Business Bureau, sparked a "media frenzy," according to NedGam and Edge 1.
They denied the allegations and said ACT had an "A-minus" rating with the BBB in Arizona.
New York Studio, the new owner of "The," sued the BBB for $70 million in September, claiming the Phoenix BBB falsely attributed dozens of consumer complaints to "The," when most of the 39 complaints were against "other entities falsely grouped as fictitious names." The BBB allegedly told media outlets that ACT and "The" "are the same company."
The studio said it has "invested significant resources in improving The's reputation" since it bought the trade name and business assets from NedGam Productions in August 2009.
"The" was the target of an early 2009 investigation by the Connecticut attorney general, according to New York Studio.
BizParentz said the plaintiffs' voluntary dismissal came after BizParentz announced plans to file an anti-SLAPP motion, used to protect defendants against litigation aimed at stifling public participation.
U.S. District Judge Valerie Fairbank dismissed the defamation action without comment.
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