Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—E.D. Cal.: Lance Armstrong not liable for allegedly false statements made in his books, (Sep 11, 2013)

By Jody Coultas, J.D.

The federal district court in Sacramento granted an anti-SLAPP motion to strike California consumer protection law claims filed by book purchasers against Lance Armstrong and publisher Penguin Group, based on allegedly misleading purchasers about the truth of statements made in Armstrong’s books (Stutzman v. Armstrong, September 9, 2013, England, M.).

The purchasers alleged that Lance Armstrong’s books, written about his life dealing with cancer and getting back to the Tour de France, violated the California consumer protection laws because they contained false and misleading statements. According to the purchasers, Lance Armstrong’s books were marketed as truthful and honest works of nonfiction biography or autobiography, despite the publisher allegedly knowing the books were fiction. Had the purchasers known the truth about Armstrong’s lies, misconduct, and involvement in a sports doping scandal, they would not have purchased the books, they claimed. Penguin Group allegedly agreed to ignore and/or avoid an investigation into the merits of the doping charges leveled against Armstrong between 1999 and 2012.

Anti-SLAPP. California’s anti-SLAPP statute provides that a cause of action against arising from any act in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.

The alleged conduct was in furtherance of the exercise of the constitutional right of free speech in connection with a public issue or an issue of public interest, according to the court. California intermediate appellate courts have developed multiple tests to determine whether a defendant’s activity is in connection with a public issue. Using any of those tests, it was without question that statements about Lance Armstrong concerned a person or entity in the public eye and a topic of widespread, public interest. The books did not only detail the personal life of Armstrong, but also his public cycling career and cheating in the Tour de France. Those were public activities, and those activities were what people wanted to know about Armstrong’s life. Therefore, the speech in the books, about the books, and the conduct in furtherance of that speech were covered by the anti-SLAPP statute.

The purchasers’ argument that the anti-SLAPP statute did not shield speech made in furtherance of Armstrong’s illegal activities was without merit, according to the court. Illegal activities are not protected by a constitutional guarantee of free speech and petition. However, the purchasers failed to show that Armstrong’s conduct was illegal. Moreover, the allegedly illegal activities were not the conduct at issue. The purchasers alleged that Armstrong engaged in smuggling and trafficking of drugs. However, the conduct at issue was the speech about the books.

Armstrong and Penguin Group were entitled to bring the anti-SLAPP motion and met the initial burden of the statute, according to the court. The purchasers’ claims were not exempt from an anti-SLAPP motion, according to the court. The anti-SLAPP procedures do not apply to actions brought solely in the public interest on behalf of the general public, as well as commercial speech. Subsection (d) of the statute provides that these exemptions do not apply to “any person engaged in the dissemination of ideas or expression in any book or academic journal, while engaged in the gathering, receiving, or processing of information for communication to the public.” Armstrong and Penguin Group were specifically the type of defendants that the Legislature sought to protect by enacting subsection (d) because they were engaged in speech-related activities.

Consumer claims. The statements contained in the books were not commercial and were afforded full First Amendment protection, according to the court. Armstrong argued that the First Amendment barred the consumer protection law claims and that the statutes apply only to commercial speech. The purchasers based their claims on three types of statements: those contained within the books themselves; those relating to the books, including promotional statements about the book and statements contained on the flyleaves and covers of the books; and those made by Armstrong relating to his use of performance enhancing drugs, but which do not specifically reference the books or promote the books. Because the California consumer protection law claims targeted this speech, the claims failed as a matter of law.

The statements contained within the book did more than propose a commercial transaction and were protected, according to the court. The content of the books was not an advertisement for a product, but an account by Armstrong of his life and cycling career, albeit partially untruthful.

Public statements regarding Armstrong’s use of performance enhancing drugs did not constitute commercial speech because they did not propose any commercial transaction, the court ruled. Assuming that the statements contained both commercial and non-commercial elements, the court considered whether the speech was admittedly advertising, referenced a specific product, or whether Armstrong had an economic motive for engaging in the speech. The public statements regarding Armstrong’s use of performance enhancing drugs were clearly not advertisements, and did not refer to a specific product. Although Armstrong and others likely had underlying economic motives when making comments denying that Armstrong used performance enhancing drugs, the other two factors weighed against finding that the statements were commercial speech.

Finally, the court found that the promotional materials relating to the books were inextricably intertwined with the books’ contents. Thus, the promotional materials were also entitled to full First Amendment protection as noncommercial speech.

The case is No. 2:13-CV-00116-MCE-KJN.

Attorneys: Clyde Talbot Turner (Turner and Associates P.A.) for Rob Stutzman. Zia F. Modabber (Katten Muchin Rosenman) for Lance Armstrong.

Companies: Penguin Group

Cases: StateUnfairTradePractices CaliforniaNews