'Avengers' VFX Gurus Suffer Blow in Big Appellate Win for Anonymous Speech

The company owned by Greg and Colin Strause has been contending with an individual who has been sending e-mails to Hollywood executives about their business practices.
Coutesy of Hydraulx
Hydraulx founder Greg Strause (left) with operations manager John "Duke" DuQuesnay

On Tuesday, a California appeals court delivered what could be a significant victory for anonymous speakers and a setback for those using courts to unmask their critics.

The latest ruling pertains to emails send out in August 2015 to several Hollywood executives about Hydraulx, the VFX company co-owned by Greg and Colin Strause, who worked on The Avengers, Terminator 3 and X-Men as well as music videos for Britney Spears, Usher, Aerosmith and U2.

As previously covered, the Brothers Strause have engendered headlines. They once worked on the alien invasion movie Battle: Los Angeles for Sony while at the same time directing Skyline, a similar alien invasion film for Universal. They've also been reported to live luxurious lifestyles while other VFX artists struggle.

In August 2015, an individual posing as "Greg Baktor" and using the account vfx.accounts@gmail.com began sending messages. One stated, "I hoped I might whistle-blow on Vitality Visual Effects and Hydraulx. I was surprised to see 'Goosebumps' on Vitalitys IMDB as Vitality is co-owned by Greg and Colin Strause of Hydraulx and I thought Sony did not have a good relationship with the Brothers after Skyline/Battle L.A."

Hydraulx sued for libel, which provoked an anonymous "John Doe 2" defendant to attempt to strike it as an impingement of First Amendment rights on a matter of public interest. The big issue came on the discovery end when the plaintiff aimed to subpoena Google in an attempt to unmask the sender. That led to a quarrel, a judge's ruling to authorize the subpoena and an appeal with big implications given that disputes of this nature are popping up more and more. For example, actor James Woods has been suing an anonymous individual who tweeted he was a "cocaine addict" and has similarly sought an unmasking.

A California appeals court on Tuesday writes that "First Amendment protection for anonymous speech requires a libel plaintiff seeking to discover an anonymous libel defendant's identity to make a prima facie showing of all elements of defamation."

The decision upholds the First Amendment principle articulated in Krinsky v. Doe 6, a 2008 case, but this time, it comes in the context where Hydraulx was arguing it was inapplicable thanks to "John Doe 2" being an alleged competitor engaging in unfair competition though harsh emails directed at clients.

A Los Angeles Superior Court judge originally ruled that the company owned by the Strause brothers had made a sufficient prima facie showing of libel by pointing to the "whistle-blow" email, which was deemed as implying civil or criminal wrongdoing and capable of being proven true or false. 

California appeals court judge Amy Hogue disagrees in her opinion (read in full here).

"In the context in which they were made, Doe 2's statements are not reasonably susceptible of an interpretation implying defamatory statements of fact beyond the facts disclosed in the emails or known to the recipients," she writes. "The specific wording of the emails and the order in which the information is communicated are instructive. Doe 2 opened his emails with cautionary language, saying, 'I hoped I might whistle-blow on Vitality Visual Effects and Hydraux.' (Italics added.) The words 'hoped' and 'might' before 'whistle-blow' signal that Doe 2 is using the term hyperbolically to introduce a communication of specific information that the recipients may not know. In context, the term explains why he is writing and introduces the information about Vitality and Hydraulx's supposed shared ownership, which, in and of itself, is not defamatory."

The appellate judge then parses more of the emails in question and offers a motivation:

"The gist of the various news articles describing the 2011 dispute between Sony (the company that retained Vitality for visual effects services on its Goosebumps project) was that Sony perceived that Hydraulx had a conflict of interest working on Skyline while under contract for Battle: Los Angeles and was surprised and angry about it. That context explained the impetus for Doe 2's uninvited emails about the potential for a new conflict of interest and Doe 2's expressed distaste for such business practices."

The opinion goes on to say that nothing in the emails suggest the anonymous sender had any inside information or superior knowledge and that the messages aren't actionable as libel because the statements were just expressed opinions not susceptible of an interpretation implying any undisclosed false and defamatory fact about Hydraulx.

"Therefore, Hydraulx failed to make a prima facie showing of libel," Hogue concludes.

As such, the trial court is directed to vacate its order granting special discovery. What's more, Hydraulx will have to pay the anonymous email sender's costs for pursuing the writ proceeding.

Gary Strause says he intends to make a further appeal up to the California Supreme Court.