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Tennessee Anti-SLAPP Law Faces Scrutiny in Tiny House Defamation Case

Only used a handful of times so far, the Tennessee statute designed to reign in lawsuits intended to chill free speech faces a constitutional challenge in a defamation case related to the TV show “Tiny House Nation.”

CHATTANOOGA, Tenn. (CN) — It began with a tiny house, and then came a dispute over its ownership, news stories, a $250 million defamation lawsuit, and the invocation of Tennessee’s new law designed to strike down lawsuits that chill protected speech.

On Thursday morning, a judge in Hamilton County heard two hours of arguments over whether the Tennessee Public Participation Act violates the state constitution by infringing on the separation of powers between legislature and judiciary.

The act, also known as the TPPA, is the state’s version of law designed to quickly quell lawsuits filed in an attempt to bury with litigation and burdens of discovery people making speech that has to do with matters that concern the public. It has only been used a handful of times.

These statutes – known as anti-SLAPP, short for Strategic Lawsuits Against Public Participation – are widespread in the U.S. Thirty states have some form of anti-SLAPP legislation.

In 2019, the Tennessee Legislature amended the state’s anti-SLAPP law that it had on its books since 1997, expanding it to apply to more types of speech. No longer did the statute narrowly apply to just people communicating to the government.

The bill took effect in July 2019. Just days before, two TV stations, one in Chattanooga, Tennessee, and the other in Los Angeles, published stories about a dispute over a tiny house. The house was built for a California couple who reportedly intended to move to Nashville to pursue a music career. The house’s construction was featured on the A&E show “Tiny House Nation.”

But one thing led to another and, according to the builder’s complaint, the couple did not pay rent or obtain third-party financing to pay for the $157,000 home after living in it for several months.

The builder, Mike Bedsole and his company Tiny House Chattanooga, obtained a detainer warrant and took possession of the home. The TV news stations ran stories about the situation. 

Bedsole filed suit last June in Hamilton County Circuit Court against the two TV stations, WTVC-TV News Channel 9 in Chattanooga and KABC-TV ABC 7 Eyewitness News in Los Angeles, and their parent companies. He alleges he lost business because of the stories and sought $250 million in damages for claims of defamation, emotional distress and interference with business relationships.  

According to the complaint, the stories “gave viewers and on-line subscribers the false impression that Mr. Bedsole had committed criminal theft or done something illegal to gain possession of the tiny home.”

In response, the media companies invoked the TPPA, saying the speech in question was a matter of concern to the public because it was about products for sale and the house itself had appeared on a national cable TV program.

Bedsole countered that the statute – largely untested in Tennessee courts so far – is unconstitutional.

In a hearing over Zoom before Judge Kyle Hedrick, Bedsole’s attorney Buck Dougherty of the Chattanooga-based firm Duncan, Hatcher, Holland & Fleenor noted anti-SLAPP statutes in Washington and Minnesota were found unconstitutional by courts in those states.

Dougherty argued the legislature infringed on the judiciary’s purview because the statute abrogated the rules of civil procedure. State lawmakers were telling the Tennessee courts what kind of standards they should apply in lawsuits alleging defamation, he said.

“When you look at the plain meaning and the words that are written in the statute ... what it says requires the court to do something that's completely 180 degrees different than what the court's been doing at the pretrial judgment stage for years.,” Dougherty argued.

Furthermore, he said, the reporters that wrote the stories should have based their accounts on the court proceedings in the case, as Tennessee’s fair report privilege – which the Tennessee Supreme Court recently bolstered – gave members of the press broad protections. But Dougherty argued the reporters did not rely on court proceedings for their stories.

Because Bedsole and Dougherty struck at the constitutionality of the statute, the Tennessee Attorney General’s Office and Deputy Attorney General Janet Kleinfelter, of the public interest division, made an appearance in order to defend the statute.

In her brief before the hearing, Kleinfelter wrote the statute did not infringe on the power of the Tennessee judiciary because judges are still free to apply the law, interpret it and continue to exercise discretion. 

The law dealt with public policy, Kleinfelter argued: While the judiciary judges, the Tennessee General Assembly hands down public policy.

“With SLAPP lawsuits, the very effect of that lawsuit is to go against an individual who has been exercising their First Amendment and their Tennessee constitutional rights ... exercising those rights and then suddenly get hit with a lawsuit that wipes them out through onerous discovery, having to respond to multiple motions,” Kleinfelter said Thursday.

She said the TPPA was a remedial statute that expanded the scope of the law passed a little over two decades before.

There are other instances where the Tennessee General Assembly passed a law that touched on the judiciary’s procedure while dealing primarily with public policy and it was widely accepted. One example of this, Kleinfelter said, was the state’s open records law, which mandates how individuals can litigate in an effort to seek records from the government.

Robb Harvey, of the Nashville firm Waller, Lansden, Dortch & Davis, the local representation for WTVC, said the law merely gives another tool to judges.

Harvey was one of the attorneys who helped write the state’s updated anti-SLAPP law.

He further argued the TPPA is not a law just for media organizations, but for anyone engaged in free speech issues.

“This statute is not a media defense statute,” Harvey said. “This defense is, everyone gets to benefit. In fact, I imagine that if the statute had been written only to protect the media that there would be a constitutional challenge based on that.”

Hedrick said he would take the arguments under advisement and rule in the next few days before each side is set to argue over more motions next week.

Daniel Horwitz, a free-speech lawyer based in Nashville, said the TPPA has “changed the entire landscape” when it comes to defamation lawsuits in Tennessee. Defendants attempting to use the statute can appeal more quickly and attorneys representing clients with shallow pockets can work on contingency rather than doing pro bono work, Horwitz wrote in an email.

So far, Horwitz said, the kind of people who have successfully used the TPPA have largely not been media companies. Rather, they include Tennesseans who posted a negative Yelp review against a neurologist and who started a petition alleging a small business engaged in animal cruelty, for instance.

“The end result is that negotiating power has flipped, outcomes have dramatically improved, and any number of SLAPP suits have been avoided entirely because many plaintiffs are no longer willing to risk the severe consequences associated with filing one,” Horwitz wrote.

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