A dispute involving an online media publisher has prompted California’s Legislature and Governor 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 2014 California Court of Appeal decision 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 California Legislature proposed Assembly Bill 988 earlier this year, which revised the language of Section 48a to expand protection to online publishers.  Governor Brown approved the bill on September 28, 2015, and the new law will take effect on January 1, 2016.  The law contains no language regarding retroactive application.

The following discussion of the case is taken from the Court of Appeal’s opinion:

On May 9, 2012, Steve Pond published an article on the media website TheWrap called “Mayan Mystery: Doc Financier Accused of Fleeing With Film Footage.”  The article discussed the chaotic production surrounding the documentary Revelations of the Mayans 2012 and Beyond.  According to the article, the film’s producer (Raul Julia-Levy) made criminal accusations against the film’s executive producer (Elisabeth Thieriot), including that she (i) stole the film’s footage and equipment, (ii) filmed on Mexican federal ground without authorization, and (iii) fled Mexico in violation of a government order.

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 § 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.  In an opinion filed on April 15, 2014, the Court determined 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.”  See Cal. Civ. Code § 48a(1).  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 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.”  See Thieriot v. The Wrapnews Inc., No. B245022, 2014 WL 1491494, at *11 (Cal. Ct. App. Apr. 15, 2014).  Additionally, the Court determined that if the California 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 California 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.  See Cal. Civ. Code § 48.5(4); see also In re Cable News Network, 106 F. Supp. 2d 1000, 1002 (N.D. Cal. 2000) (“[T]he plain statutory language makes § 48a applicable to all television broadcasts.”).

California’s Legislature took the Court’s hint.  Earlier this year, the Legislature proposed AB 988 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.”  The bill passed the Senate Floor on August 31, the Assembly Floor on September 1, and Governor Jerry Brown approved the bill on September 28, 2015.  It will take effect on January 1, 2016.

This change in the law 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, 459 P.2d 912 (Cal. 1969) (“In enacting section 48a the Legislature intended to afford publishers an opportunity to correct committed errors before subjecting them to liability.”)  Under Section 48a, a publisher cannot be liable for general or exemplary (aka punitive) damages unless he or she (i) receives a demand to correct any libelous statements and (ii) fails to make such corrections.  See Cal. Civ. Code § 48a(1) – (2).  Therefore, unless a plaintiff sends such a correction request, online publishers cannot be liable for anything except special damages:

• “Special damages” are all damages which plaintiff alleges and proves that he has suffered in respect to his property, business, trade, profession or occupation, including such amounts of money as the plaintiff alleges and proves he has expended as a result of the alleged libel, and no other.

Cal. Civ. Code § 48a(4)(b).  Meanwhile, the following damages would not be available:

• “General damages” are damages for loss of reputation, shame, mortification and hurt feelings.
• “Exemplary damages” are damages which may in the discretion of the court or jury be recovered in addition to general and special damages for the sake of example and by way of punishing a defendant who has made the publication or broadcast with actual malice.

Cal. Civ. Code § 48a(4)(a) – (c).  In other words, absent the opportunity to correct allegedly defamatory content, publishers’ potential liability to plaintiffs will be limited to economic losses.  By enacting this law, California reduces online publishers’ risks and ensures that they will not be blindsided with general and punitive damages.

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