California Supreme Court Revives Libel Suit Over Warnings of Content Piracy

Alkiviades Alki David - Getty - H 2019
Vivien Killilea/WireImage

In a big legal win that will impact free speech cases in California, FilmOn has been given the green light to pursue DoubleVerify for trade libel. On Monday, the Supreme Court of California reversed a lower court's decision holding that when DoubleVerify told advertisers five years ago that FilmOn was engaged in "copyright infringement" and "adult content," this constituted protected activity in connection with a matter of public interest.

FilmOn is the streaming service started by eccentric entrepreneur Alki David, who has been in all sorts of legal fights throughout the years, including battles with TV networks, a war over holograms and, most recently, the alleged sexual assault of an employee.

DoubleVerify provides confidential reports to advertisers who wish to avoid placing promotions in trepidatious places.

After FilmOn was disparaged in one of DoubleVerify's reports, David's company filed suit. DoubleVerify was able to initially escape claims including tortious interference by invoking California's anti-SLAPP statute, which is meant to deter legal actions that impinge on one's First Amendment activity.

The trial court's ruling striking FilmOn's complaint was then upheld by a lower California appeals court. That decision two years ago was welcomed by the Motion Picture Association of America, which successfully got the opinion published. In a letter to the appellate court, the MPAA spoke of how the internet advertising ecosystem needed information about websites engaged in illegal conduct and hailed how DoubleVerify had prevailed over an attempted chilling of free speech. 

But now, the Supreme Court of California decides that SLAPP analysis shouldn't apply in this case.

FilmOn argued that since DoubleVerify was engaged in "commercial" speech restricted to a private audience, DoubleVerify couldn't take advantage of the speech protections under the catchall provision of the SLAPP law. According to FilmOn, DoubleVerify's advertising reports are different than, say, the MPAA's film ratings, which are distributed widely and provide insight to the public on adult content.

Monday's opinion (read here in full) from Justice Mariano-Florentino Cuéllar states that the commercial character of speech is not dispositive to the question of whether the SLAPP statute is triggered. Nevertheless, he adds that judges must examine context around statements and connection with a matter of public interest. 

"It is true enough that the various actions of a prominent CEO, or the issue of children’s exposure to sexually explicit media content –– in the abstract –– seem to qualify as issues of public interest," writes Cuéllar. "But even assuming so, the focus of our inquiry must be on the specific nature of the speech, rather than on any generalities that might be abstracted from it.”

How did DoubleVerify issue its reports? And did the company further the public conversation on an issue of public interest?

"It seems plain enough that DoubleVerify’s reports did no such thing," writes the justice. "DoubleVerify issues its reports not to the wider public — who may well be interested in whether FilmOn hosts content unsuitable for children or whether its streaming platform infringes copyright — but privately, to a coterie of paying clients. Those clients, in turn, use the information DoubleVerify provides for their business purposes alone. The information never entered the public sphere, and the parties never intended it to."

So because of the tight circulation and a report that never furthered free speech in connection with an issue of public interest, DoubleVerify must again contend with a libel claim. The lawsuit may ultimately be doomed anyway as the trial judge has tipped his opinion on the likelihood of FilmOn prevailing on the merits. Nevertheless, FilmOn enjoys another shot against a defendant which allegedly damaged its advertising revenue.