GSI EXCHANGE VS MARK COWPER

Tentative Rulings

Case Number: 20SMCV01355 Hearing Date: September 22, 2022 Dept: M

CASE NAME: GSI Exchange v. Cowper

CASE NO.: 20SMCV01355

MOTION: Anti-SLAPP

HEARING DATE: 9/22/2022

RECOMMENDATION

Defendant Mark Cowper’s special motion to strike is DENIED.

BACKGROUND

On September 24, 2020, Plaintiff GSI Exchange filed the instant defamation action against Defendant Mark Cowper. The Complaint states four causes of action for defamation – libel, defamation – libel per se, false light, and negligence.

The Complaint alleges that GSI made certain purchases for gold coins in August 2019. Cowper was fully aware of the inherent risks in his investment. In December 2019, Cowper demanded that GSI purchase back the products at the market rate at the time of purchase. To coerce Plaintiff into this deal, Defendant instituted threatened criminal prosecution. He also made false, defamatory posts on social media websites which suggested GSI uses fraudulent tactics and activities to sell their products.

On December 14, 2020, Defendant filed a special motion to strike against the complaint. Plaintiff substantively opposed. However, the Court found that because Defendant was in default, his motion could not be heard. The Court subsequently vacated default and re-set the instant motion for hearing.

Legal Standard

CCP section 425.16 permits the Court to strike causes of action arising from an act in furtherance of the defendant's right of free speech or petition, unless the plaintiff establishes that there is a probability that the plaintiff will prevail on the claim.

“The anti-SLAPP procedures are designed to shield a defendant’s constitutionally protected conduct from the undue burden of frivolous litigation.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 393.) “The anti-SLAPP statute does not insulate defendants from any liability for claims arising from the protected rights of petition or speech. It only provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity.” (Id. at 384.)

“Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success.” (Baral, supra, 1 Cal.5th at 384, citation omitted.) The California Supreme Court has “described this second step as a ‘summary-judgment-like procedure.’ The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff’s evidence as true, and evaluates the defendant’s showing only to determine if it defeats the plaintiff’s claim as a matter of law. ‘[C]laims with the requisite minimal merit may proceed.’” (Id. at 384-385 [citations omitted].)

Analysis

First Prong

Defendant moves to strike the entire complaint.

CCP section 425.16(e) defines protected acts as the following: 1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; 2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; 3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; or 4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.

“A public forum is a place open to the use of the general public for purposes of assembly, communicating thoughts between citizens, and discussing public questions.” (Kurwa v. Harrington, Foxx, Dubrow & Canter, LLP (2007) 146 Cal.App.4th 841, 846.) The term public forum is construed broadly to include settings beyond those protected by the First Amendment. (Seeling v. Infinity Boradcasting Corp. (2002) 97 Cal.App.4th 798, 807.) A website can be a public forum if statements on the website are “accessible to anyone who chooses to visit the site.” (Wong v. Tai Jing (2010) 189 Cal.App.4th 1354, 1366-1367.)

“[P]ublic interest within the meaning of the anti-SLAPP statute has been broadly defined to include, in addition to government matters, private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity.(Ruiz v. Harbor View Community Assn. (2005) 134 Cal.App.4th 1456, quotations omitted, quoting Du Charme v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107, 115.) “[I]n cases where the issue is not of interest to the public at large, but rather to a limited, but definable portion of the public (a private group, organization, or community), the constitutionally protected activity must, at a minimum, occur in the context of an ongoing controversy, dispute or discussion, such that it warrants protection by a statute that embodies the public policy of encouraging participation in matters of public significance.” (Du Charme, supra, 110 Cal.App.4th at 119.)

Defendant meets his initial burden to show that the gravamen of the complaint and each cause of action arises from protected activity. The Complaint generally alleges that Defendant engaged in a campaign to damage Plaintiff’s reputation by publishing certain false statements online. (Compl., 10-12.) These written statements were made on a website open to the public. (Id.) These statements concern Plaintiff’s business practices and trustworthiness. The public is interested in such matters. (See Chaker v. Mateo (2012) 209 Cal.App.4th 1138 [negative statements about an ex-boyfriend's character and business practices on Ripoff Report, a website where members of the public could comment on the reliability and honesty of various providers of goods and services, were held as matters of public interest].) Each of the causes of action stem from this same protected activity. (Compl., 17, 22, 26, 30-32.) Accordingly, the first prong is met.

Second Prong

Plaintiff now has the burden to show probability of success on the merits.

The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage. (Wong v. Tai Jing (2010) 189 Cal.App.4th 1354, 1369.)

“Libel is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.” (Civ. Code, 45; see Wong, supra, 189 Cal.App.4th at 1369 (quoting Civil Code section 45).) Libel is per se if the statement is defamatory on its face and nothing needs to be added to make its defamatory meaning understood. (Civ. Code 45a; Barnes-Hind, Inc. v. Superior Court (1986) 181 Cal.App.3d 377, 381.) Libel per quod is all libel that is not libel per se and would require a plaintiff to show special damages. (Civ. Code 48a(d)(2).)

To prevail on a false light invasion of privacy claim, a plaintiff must show that the defendant made statements placing him in a false light that would be highly offensive to a reasonable person and that the defendant had knowledge of or acted in reckless disregard as to the falsity of the statement. (Fellows v. National Enquirer, Inc. (1986) 42 Cal.3d 234, 238.

“In order to state a cause of action for negligence, the complaint must allege facts sufficient to show a legal duty on the part of the defendant to use due care, a breach of such legal duty, and the breach as the proximate or legal cause of the resulting injury.” (Bellah v. Greenson (1978) 81 Cal.App.3d 614, 619.)

Plaintiff provides that Defendant was initially happy with his transactions with Plaintiff, and sent a text post stating "Hey Rick this is Mark, just want to let you know I'm really happy about my deal that we put together couldn’t be happier thanks a lot hope you have a great day and a fantastic Labor Day weekend." (Anderson Decl., 3.) Defendant was later convinced by an acquaintance to try to get out of the deal. (Id., 4-6.) Defendant began a campaign of spreading the assertions discussed infra, including that that he wanted "Gold Canadian Maple Leaf” coins despite the fact he was aware that Plaintiff did not sell such Gold Canadian Maple Leaves, and, moreover, signed an order approving the purchase of polar bear and cubs. (Id. 7.) Thus, Defendant’s posts concerning the Polar Bears are false and he likely had knowledge of this falsity. (Id., 7-8.) Defendant indicated his interest in pulling down the comments against Plaintiff but represented that he did not know how to do so. (Id., 15.) Plaintiff has suffered reputational damage, such as the loss of future business and clientele. (Id., 17.)

This evidence establishes a prima facie case for defamation. Plaintiff has demonstrated that Defendant published the comments at issue, that at least some of the comments are substantively false statements of fact. The statements concern unethical activity and reflect on the integrity of Plaintiff. Given that the comments pertain to Plaintiff’s trade, business and honesty, the defamation may be properly considered per se.

Defendant asserts that Plaintiff cannot prevail since, as a matter of law, “only one” of the alleged defamatory statements are a verifiable fact. Statements of facts are actionable, while statements of opinion are not. (Wong, supra, 189 Cal.App.4th at 1369.) However, “where an expression of opinion implies a false assertion of fact, the opinion can constitute actionable defamation.” (Id. at 1370.) “The critical question is not whether a statement is fact or opinion, but ‘whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.’” (Id.) “‘To determine whether a statement is actionable fact or nonactionable opinion, courts use a totality of the circumstances test of whether the statement in question communicated or implies a provably false statement of fact.’” (Id.) “[T]he determination of whether the allegedly defamatory statement constitutes fact or opinion is a question of law.” (Selleck v. Globe International, Inc. (1985) 166 Cal.App.3d 1123, 1133.)

Multiple statements alleged are statements of fact, not mere opinions. For example: 1) Defendant’s alleged statement that Plaintiff “lied” about the gold’s value; 2) Defendant “never asked for Gold Polar Bears” – implying that Plaintiff delivered the incorrect goods; and 3) Plaintiff’s principal Mr. Anderson “worked for two companies prior to this that were charged with fraud”—which fairly implies Mr. Anderson’s participation in the fraud and impugns Plaintiff with that fraud. Defendant was aware that his statement regarding the Polar Bears were false, since signed a purchase order approving the purchase of the Polar Bears. Each of these examples present verifiable statements of fact, or implied statements of fact, rather than mere opinions.

Therefore, Plaintiff meets its responsive burden to showing minimal merits of its defamation-based claims. As noted, this is the gravamen of the entire action. Accordingly, the motion to strike is DENIED.

The Court further does not find that the motion was frivolous, given Defendant’s success on the first prong. Therefore, no fees are awarded.

Case Number: 20SMCV01355 Hearing Date: July 7, 2022 Dept: M

CASE NAME: GSI Exchange v. Cowper

CASE NO.: 20SMCV01355

MOTION: Motion to Vacate Default/Default Judgment

HEARING DATE: 9/24/2022

BACKGROUND

On September 24, 2020, Plaintiff GSI Exchange filed the instant defamation action against Defendant Mark Cowper. The Complaint alleges the following: GSI made certain purchases for gold coins in August 2019. Cowper was fully aware of the inherent risks in his investment. In December 2019, Cowper demanded that GSI purchase back the products at the market rate at the time of purchase. To coerce Plaintiff into this deal, Defendant instituted threatened criminal prosecution. He also made false, defamatory posts on social media websites which suggested GSI uses fraudulent tactics and activities to sell their products.

On November 23, 2020, Plaintiff filed a proof of service, indicating service of Defendant on October 15, 2020. On that same date, the Court entered default against Defendant pursuant to Plaintiff’s request. On December 14, 2020, Defendant filed a special motion to strike against the complaint. Plaintiff substantively opposed the motion. On January 25, 2022, the Court heard the anti-SLAPP motion. The Court found that because Defendant was in default, his motion could not be heard.

On April 18, 2022, Cowper filed the instant motion to vacate default.

Analysis

There is no dispute that default was entered prior to the expiration of time for Defendant to respond. Service of substituted summons, as in this matter, is deemed complete on the 10^th day after the mailing. (Code of Civ. Proc., 415.20(b).) Defendant had 30 days after service was complete within which to respond to the complaint. (Code of Civ. Proc., 412.20(a)(3).) October 25, 2020, was the 10th day after the mailing. Thirty days from that date would be November 24, 2020. Thus, the default entered on November 23 was premature and entered in error. Plaintiff does not contest these facts. Such a clerical error has not prejudiced Plaintiff.

The Court has the inherent authority to vacate the default. Apart from any statutory authority, a court has inherent, equitable power to set aside a default or default judgment on the ground of extrinsic fraud or mistake. (Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1300.) [party in default must show a meritorious defense; a satisfactory excuse for not presenting a defense; and diligence in seeking to set aside the default once discovered] see Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981 [extrinsic mistake broadly applied to cover circumstances extrinsic to the litigation have cost a party a hearing on the merits].) The court clerk in entering a default judgment may consider such an extrinsic mistake which resulted in the default being entered.

Defendant acted reasonably in not filing this motion earlier. Defendant already filed his initial responsive pleadings in December 2021. Moreover, Defendant was led to believe by the Court and Plaintiff’s conduct that Defendant was not in default. Plaintiff substantively replied to the motion to strike. The Court, for its part, did not realize that Defendant’s default was entered during the ex parte hearing. Thus, Defendant acted reasonably in not filing for relief until the Court brought the default status to his attention at the anti-SLAPP hearing.

Accordingly, Defendant’s motion is GRANTED. The Court will accept the anti-SLAPP motion filed December 14, 2020, as the responsive pleading. The Court will therefore re-set the motion back on calendar.

Case Number: 20SMCV01355 Hearing Date: January 25, 2022 Dept: M

Case Name: GSI Exchange v. Mark Cowper, et al.

Case No.: 20SMCV01355

Motion: Cowper’s Special Motion to Strike (Anti-SLAPP)

Hearing Date: 03/23/2021

Background

Plaintiff GSI Exchange filed a complaint on September 24, 2020, against Mark Cowper and Does 1 – 10 for (1) defamation – libel, (2) defamation - libel per se, (3) false light, and (4) negligence. Plaintiff GSI Exchange is “a company in the business of facilitating acquisitions of both the buying and selling of Precious metals for its customers,” specifically gold and silver coins. (Compl. 1, 5.) Plaintiff alleges that Defendant made the following statements, and bases the complaint on these statements:

1. “[he] was in gold maple leaves and they manipulated [him] into a deal where they overcharged [him] by around $130,000 for gold coins.”

2. “lied to me about their value”

3. “They seem like another one of these scam gold companies.”

4. “I wanted bullion coins priced close to market.”

5. “I certainly never asked for Gold Polar Bears.”

6. “They told me that they create a market in these coins.”

7. “Anthony Anderson worked for two companies prior to this that were charged with fraud.”

(See Compl. 12, 17, 22, 26.)

Defendant Mark Cowper was served by substitute service on October 15, 2021. (See 11/23/2020 Proof of Service). Plaintiff GSI Exchange filed a request for entry of default and obtained a default against Cowper on the same date. (11/23/2020 Request for Entry of Default.) On December 14, 2020, Defendant filed a special motion to strike seeking to strike the entire complaint.

Legal standard

“A cause of action against a person arising from any act of that person 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” (Code Civ. Proc., 425.16.(b)(1).)

Analysis

Default was entered against Defendant on November 23, 2020, and he remains in default. “The entry of a default terminates a defendant's rights to take any further affirmative steps in the litigation until either its default is set aside or a default judgment is entered. (Forbes v. Cameron Petroleums, Inc. (1978) 83 Cal.App.3d 257, 262–263, 147 Cal.Rptr. 766; 4 Witkin, Cal.Procedure (2d ed. 1971) Proceedings Without Trial, 148, p. 2809; see Luz v. Lopes (1960) 55 Cal.2d 54, 59, fn. 2, 10 Cal.Rptr. 161, 358 P.2d 289.)” (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385.) “A defendant against whom a default has been entered is out of court and is not entitled to take any further steps in the cause affecting plaintiff's right of action; he cannot thereafter, until such default is set aside in a proper proceeding, file pleadings or move for a new trial or demand notice of subsequent proceedings.” (Id. at 386 [quoting Brooks v. Nelson (1928) 95 Cal.App. 144, 147–148] [emphasis added].)

Defendant has not set aside the default. While Defendant appeared in January 2021 to advance the hearing on this motion, the Court did not realize that Defendant was currently in default status at that time. Since Defendant has not set aside the default, the Court takes the hearing on this motion off calendar.

Case Number: 20SMCV01355    Hearing Date: March 23, 2021    Dept: M

Case Name: GSI Exchange v. Mark Cowper, et al.

Case No.: 20SMCV01355

Motion: Cowper’s Special Motion to Strike (Anti-SLAPP)

Hearing Date: 03/23/2021

Background

Plaintiff GSI Exchange filed a complaint on September 24, 2020, against Mark Cowper and Does 1 – 10 for (1) defamation – libel, (2) defamation - libel per se, (3) false light, and (4) negligence. Plaintiff GSI Exchange is “a company in the business of facilitating acquisitions of both the buying and selling of Precious metals for its customers,” specifically gold and silver coins. (Compl. ¶¶ 1, 5.) Plaintiff alleges that Defendant made the following statements, and bases the complaint on these statements:

1. “[he] was in gold maple leaves and they manipulated [him] into a deal where they overcharged [him] by around $130,000 for gold coins.”

2. “lied to me about their value”

3. “They seem like another one of these scam gold companies.”

4. “I wanted bullion coins priced close to market.”

5. “I certainly never asked for Gold Polar Bears.”

6. “They told me that they create a market in these coins.”

7. “Anthony Anderson worked for two companies prior to this that were charged with fraud.”

(See Compl. ¶¶ 12, 17, 22, 26.)

Defendant Mark Cowper was served by substitute service on October 15, 2021. (See 11/23/2020 Proof of Service). Plaintiff GSI Exchange filed a request for entry of default and obtained a default against Cowper on the same date. (11/23/2020 Request for Entry of Default.) On December 14, 2020, Defendant filed a special motion to strike seeking to strike the entire complaint.

Legal standard

“A cause of action against a person arising from any act of that person 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” (Code Civ. Proc., ; 425.16.(b)(1).)

Analysis

Defendant was entered against Defendant on November 23, 2020, and he remains in default. “The entry of a default terminates a defendant's rights to take any further affirmative steps in the litigation until either its default is set aside or a default judgment is entered. (Forbes v. Cameron Petroleums, Inc. (1978) 83 Cal.App.3d 257, 262–263, 147 Cal.Rptr. 766; 4 Witkin, Cal.Procedure (2d ed. 1971) Proceedings Without Trial, ; 148, p. 2809; see Luz v. Lopes (1960) 55 Cal.2d 54, 59, fn. 2, 10 Cal.Rptr. 161, 358 P.2d 289.)” (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385.) “A defendant against whom a default has been entered is out of court and is not entitled to take any further steps in the cause affecting plaintiff's right of action; he cannot thereafter, until such default is set aside in a proper proceeding, file pleadings or move for a new trial or demand notice of subsequent proceedings.” (Id. at 386 [quoting Brooks v. Nelson (1928) 95 Cal.App. 144, 147–148] [emphasis added].) Here, Defendant has not set aside the default. While Defendant appeared in January 2021 to advance the hearing on this motion, the Court did not realize that Defendant was currently in default status. Since Defendant has not set aside the default, the court takes the hearing on this motion off calendar.