Libel law change good for publishers

A dispute involving an online media publisher has prompted the California Legislature and Gov. Jerry Brown to revise California's libel law in an effort to protect such publishers.

California's Civil Code Section 48a previously limited a plaintiff suing for libel in a newspaper to special damages unless he or she demanded that the publisher correct the allegedly false statements and the publisher failed to make such corrections. A California Court of Appeal decision, Thieriot v. The Wrapnews Inc., B245022 (April 15, 2014), refused to extend this protection to online media publications, finding that the term "newspaper" meant "a publication that was printed on inexpensive paper, often daily" when Section 48a was enacted in 1931 and amended in 1945. Partially in recognition of this decision, the state Legislature proposed Assembly Bill 998 earlier this year, which revised the language of Section 48a to expand protection to online publishers. Brown approved the bill in September and the new law will take effect Jan. 1, 2016. The law contains no language regarding retroactive application.

Five days after the article was published, Thieriot sued TheWrap and Pond, stating that the article's accusations were untrue and were based solely on false claims made by Julia-Levy. Among other things, Thieriot accused TheWrap of publishing the article despite (i) receiving information placing Julia-Levy's credibility and reputation in question, and (ii) a request from Thieriot's representative for time to investigate the allegations and to provide further facts and documents to Pond.

The defendants moved to strike the complaint pursuant to California's Anti-SLAPP Statute - Code of Civil Procedure Section 425.16 - arguing that there were issues of public interest and that Thieriot could not establish a probability of prevailing on her claims. The trial court granted the motion to strike, and Thieriot appealed.

The Court of Appeal reversed, determining that Thieriot produced sufficient evidence to demonstrate a probability of prevailing on her defamation and false light invasion of privacy claims. Noteworthy is the court's discussion of Section 48a.

Section 48a provides that "In any action for damages for the publication of a libel in a newspaper, or of a slander by radio broadcast, plaintiff shall recover no more than special damages unless a correction be demanded and be not published or broadcast, as hereinafter provided." According to the defendants, because Thieriot did not comply with Section 48a's requirement to demand a correction and did not properly allege special damages in her complaint, she could not (i) show that she was entitled to special damages and, therefore, (ii) establish a probability of prevailing on the merits of her claims.

The Thieriot court disagreed, finding that Section 48a was limited to defamatory material in a newspaper or radio broadcast, and that a "newspaper" did not include online publications such as TheWrap. According to the court, when Section 48a was enacted in 1931 and amended in 1945, "a 'newspaper' was understood to mean a publication that was printed on inexpensive paper, often daily." Additionally, the court determined that if the state Legislature wanted Section 48a to apply to websites, it could have amended the statute to say so, or enacted an additional statute to bring websites within the meaning of "newspaper," but that it did neither. By way of example, the court cites the fact that the Legislature enacted Civil Code Section 48.5 in 1949 to expand the term "radio broadcast" to include "both visual and sound radio broadcasting," thereby expanding Section 48a's protections to television broadcasts.

California's Legislature took the hint. Earlier this year, it proposed AB 998 to limit a plaintiff to special damages in cases involving digital publications. AB 998 replaced the term "newspaper" in Section 48a with the phrase "daily or weekly news publication," defined as a "publication, either in print or electronic form, that contains news on matters of public concern and that publishes at least once a week."

This change is good news for online publishers, which now receive those protections previously afforded to print journalists, as well as television and radio broadcasters. The purpose of Section 48a is to afford publishers an opportunity to identify and correct errors before subjecting them to expensive legal proceedings or to liability. See Kapellas v. Kofman, 1 Cal. 3d 20, 31 (1969). Under Section 48a, a publisher cannot be liable for general or exemplary/punitive damages unless he or she (i) receives a demand to correct any libelous statements and (ii) fails to make such corrections. Therefore, unless a plaintiff sends such a correction request, plaintiffs are limited to seeking special damages, aka economic losses. By enacting this law, California reduces online publishers' risks and ensures that they will not be blindsided with general and punitive damages.

Lee Brenner is a partner and Andreas Becker is an associate with Kelley Drye & Warren in Los Angeles, where they focus on media and business litigation. You can reach them at lbrenner@kelleydrye.com and abecker@kelleydrye.com.