United States: That's TheWrap: A Change In California Law To Protect Online Media Publications

Last Updated: January 14 2016
Article by Lee Brenner and Andreas Becker

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).

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."

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, 459 P.2d 912 (Cal. 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. See Cal. Civ. Code § 48a(1) – (2). Therefore, unless a plaintiff sends such a correction request, plaintiffs are limited to seeking special damages, a.k.a. economic losses. By enacting this law, California reduces online publishers' risks and ensures that they will not be blindsided with general and punitive damages.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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