Phoenix Trading, Inc. v. Loops LLC , 732 F.3d 936 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PHOENIX TRADING, INC., a No. 11-36053
Washington corporation, DBA
Amercare Products Inc.; WENDY D.C. No.
HEMMING, an individual, 2:10-cv-00920-
Plaintiffs-Appellants, JLR
v.
OPINION
LOOPS LLC, a Delaware limited
liability corporation; LOOPS
FLEXBRUSH LLC, a Delaware
limited liability corporation; STEVEN
L. KAYSER, an individual,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
James L. Robart, District Judge, Presiding
Submitted April 11, 2013*
Seattle, Washington
Submission Vacated and Deferred July 15, 2013
Resubmitted October 4, 2013
Filed October 4, 2013
*
The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2)(c).
2 PHOENIX TRADING, INC. V. LOOPS LLC
Before: A. Wallace Tashima and Consuelo M. Callahan,
Circuit Judges, and Raner C. Collins, District Judge.**
Opinion by Judge Tashima
SUMMARY***
Washington Anti-SLAPP Statute
The panel affirmed the district court’s order striking a
complaint under Washington’s anti-SLAPP statute.
In a defamation action arising out of a business dispute
between companies that design and distribute hygiene
products for prisoners, the panel held that the district court
did not abuse its discretion by entertaining the untimely anti-
SLAPP motion. The panel also held that plaintiff could not
show a likelihood of success as to any of the alleged
defamatory statements, and therefore, the complaint was
properly dismissed under Washington’s anti-SLAPP statute.
**
The Honorable Raner C. Collins, United States District Judge for the
District of Arizona, sitting by designation.
***
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PHOENIX TRADING, INC. V. LOOPS LLC 3
COUNSEL
Brooks F. Cooper, Portland, Oregon, for Plaintiffs-
Appellants.
Nicholas L. Jenkins and Amber L. Pearce, Floyd, Pflueger &
Ringer, P.S., Seattle, Washington for Defendants-Appellees.
OPINION
TASHIMA, Circuit Judge:
This defamation action arises out of a business dispute
between companies that design and distribute hygiene
products for prisoners. One of those companies, Loops,
designed a flexible toothbrush made for safe use in prisons
and then bid on a contract with the New York City
Department of Corrections (“NYC-DOC”). The other
company, Amercare, ultimately won the contract using a
similar toothbrush. In a series of letters to government
officials and to the press, Loops then alleged that Amercare
had engaged in procurement fraud because, among other
things, Amercare had counterfeited Loops products. Based
on those statements, Amercare filed this defamation action in
Washington state court. The action was removed to the
Western District of Washington, and the district court granted
Loops’ motion to strike the complaint under Washington’s
anti-SLAPP statute. This appeal followed. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm.
4 PHOENIX TRADING, INC. V. LOOPS LLC
I.
Plaintiffs-Appellants are Phoenix Trading, Inc., dba
Amercare Products, Inc., and Wendy Hemming (together
“Amercare”). Amercare imports and distributes toiletries and
health products, and it often contracts with correctional
institutions. Hemming is the majority shareholder and
president of Amercare. Defendants-Appellees are Loops
LLC, Loops Flexbrush LLC, and Steven Kayser (collectively,
“Loops”). Loops designs and markets oral hygiene products
for safe use in prisons. Kayser is the founder of Loops and
the inventor of the Loops Flexbrush, a toothbrush with a
flexible handle that cannot be altered into a shank.1 Loops
applied for a patent on the Loops Flexbrush in August 2004,
and the patent issued on February 26, 2008.
A. The Patent Litigation
On July 30, 2010, Loops filed a patent infringement
action in the Western District of Washington. In that action,
Loops alleged that: Amercare fraudulently obtained a sample
of the Loops Flexbrush; sent it to China for copying; and then
– relying on pricing information obtained from Loops –
underbid Loops for a contract with the NYC-DOC. Loops,
LLC v. Phoenix Trading, Inc., No. 08-1064, 2010 WL
3041866, at *1–*3 (W.D. Wash. 2010).
The district court granted partial summary judgment to
Amercare. It held that Loops could not recover monetary
damages because Amercare’s last sale of the allegedly
infringing toothbrush occurred no later than May 22, 2008,
1
A “shank” is a prison-made knife. See United States v. Urena,
659 F.3d 903, 905–06 (9th Cir. 2011).
PHOENIX TRADING, INC. V. LOOPS LLC 5
yet Loops had not adequately marked its product until
September 12, 2008, and had not notified Amercare of its
patent until June 13, 2008. Thus, the district court held that
under 35 U.S.C. § 287, Loops could not recover monetary
damages for its patent infringement claim. Id. at *4–*5,
*11–*12. The district court also granted summary judgment
on several related claims. Id. At *11–*12.2
B. The Defamation Litigation
On February 18, 2010, during the pendency of the patent
litigation, Amercare filed a defamation action against Loops
in Washington state court, and the action was later removed
to the Western District of Washington.3 Phoenix Trading,
Inc. v. Kayser, No. 10-0920, 2011 WL 3158416, at *1–*2
(W.D. Wash. 2011). The defamation claims target four sets
of statements.
1. Statements regarding alteration of Loops
toothbrushes
Loops – through either Kayser or Kayser’s counsel – sent
three letters to various New York City officials, all alleging
that Amercare had altered Loops toothbrushes and passed
them off as its own. All three letters were part of Loops’
2
A few months later, Loops filed a motion for discovery sanctions based
on newly discovered evidence. See Loops LLC v. Phoenix Trading, Inc.,
No. 08-1064, 2011 WL 915785, at *1, *6–*7 (W.D. Wash. 2011). For
reasons that do not bear on this appeal, the court sanctioned Amercare by
entering judgment in favor of Loops. Id. at *10.
3
Amercare had amended its state court complaint to add a claim for
false trademark registration under 15 U.S.C. § 1120. Phoenix Trading,
2011 WL 3158416, at *2. That claim was later voluntarily dismissed.
6 PHOENIX TRADING, INC. V. LOOPS LLC
claim that Amercare won the contract by way of procurement
fraud. The letters alleged that Amercare had filed off the
Loops trademark from sample Loops toothbrushes, affixed
the Amercare trademark, and presented the altered
toothbrushes to the NYC-DOC in its bid. The first letter, sent
on August 20, 2007, was addressed to Mayor Michael
Bloomberg and several other New York City officials. The
second letter, sent on August 22, 2007, was addressed to
Mario Crescenzo, New York’s Chief Contracting Officer.
The third letter, sent on September 12, 2007, was addressed
to New York’s Office of the General Counsel.
2. Statements regarding lead content of Amercare
toothbrushes
On February 18, 2008, Kayser sent a letter to New York
officials and several New York Times reporters, alleging that
Amercare toothbrushes were “laden with lead and heavy
metals” and had “excessive amounts of lead and heavy
metals.” These allegations were based on an examination –
conducted by Intertek (a testing laboratory) and
commissioned by Loops – of the Amercare toothbrushes.
The Intertek report had detected some levels of lead and other
heavy metals, but the report concluded that the products
easily complied with relevant regulations.
3. Statements regarding patent infringement
In certain communications, Loops accused Amercare of
infringing one of its patents. These statements were made,
with varying degrees of clarity, in: (1) the February 18, 2008,
letter discussed above; (2) an April 21, 2008, letter to various
New York City officials, which referenced toothbrushes that
the NYC-DOC purchased in 2007; (3) a May 19, 2008, letter
PHOENIX TRADING, INC. V. LOOPS LLC 7
sent to the International Anticounterfeiting Coalition (“IAC”),
the press, and various New York City officials; and (4) a July
29, 2008, letter to the press.
4. Statements regarding counterfeit Loops
toothbrushes
Loops also accused Amercare of “counterfeiting.” In
most of the letters discussed above, Loops stated that
Amercare had provided “counterfeit toothbrushes” to the
NYC-DOC. Similar allegations were contained in a letter
sent to the IAC, Harper’s Bazaar Magazine, and the New
York Sun.
C. District Court ruling
The parties filed cross-motions for summary judgment,
and Loops filed a special motion to strike under
Washington’s anti-SLAPP statute, Wash. Rev. Code
§ 4.24.525.4 The court first found that the anti-SLAPP
motion was timely. Phoenix Trading, 2011 WL 3158416, at
*6. The court then ruled that, under § 4.24.510, Loops was
immune from civil liability for all statements made to
government agencies or officials. Id. at *7.
Turning to the statements made to the media, the court
concluded that the statements were made to a “public forum
in connection with an issue of public concern” under
§ 4.24.525(2)(d). Id. As for the statements to the IAC, the
court held that they were in furtherance of Loops’ free speech
rights and in connection with an issue of public concern. Id.
4
All subsequent statutory references are to the Revised Code of
Washington, unless otherwise noted.
8 PHOENIX TRADING, INC. V. LOOPS LLC
at *8. Thus, with respect to the media and IAC statements,
the burden shifted to Amercare to show a probability of
success on the merits.
The court then concluded that Amercare failed to show a
likelihood of overcoming the two-year statute of limitations
for defamation claims. Id. at *9–*10. This deficiency
applied to the statements regarding product alteration and
counterfeiting. As for the remaining statements, the court
held that Amercare’s contract with a public agency placed it
in the role of a public official; accordingly, Amercare had to
show that Loops acted with malice. Id. at *11. In the district
court’s view, Amercare had failed to carry its burden of
showing malice with respect to any of the four categories of
statements. Id. at *11–*16. Accordingly, the court granted
the anti-SLAPP motion and denied the summary judgment
motions as moot. Id. at *16.
II.
A. The Anti-SLAPP Statute
Washington’s anti-SLAPP statute, like many others
throughout the country, was designed quickly to dispose of
and deter lawsuits that chill the exercise of speech and
petition rights. See S.S.B. No. 6395, 61st Leg., Reg. Sess.,
2010 Wash. Legis. Serv. Ch. 118, § 1. Under
§ 4.24.525(4)(a), “[a] party may bring a special motion to
strike any claim that is based on an action involving public
participation and petition.”5 The anti-SLAPP analysis then
5
An “action involving public participation” includes, among other
things:
PHOENIX TRADING, INC. V. LOOPS LLC 9
proceeds in two steps. First, the movant must show by a
preponderance of the evidence that the claim is “based on an
action involving public participation and petition.”
§ 4.24.525(4)(b). If the moving party meets that burden, the
responding party mush establish, by clear and convincing
evidence, a likelihood of success on the merits. Id. If the
responding party meets its burden, the motion must be
denied. Id.
Amercare did not contest the first step in the district court,
and on appeal it concedes that its claims involve public
participation. See Phoenix Trading, 2011 WL 3158416, at
*7–*8. Accordingly, after addressing the timeliness of the
motion, we address only the second step of the anti-SLAPP
analysis.
B. Standards of Review
We review an anti-SLAPP ruling de novo. Vess v. Ciba-
Geigy Corp., 317 F.3d 1097, 1102 (9th Cir. 2003). There is
little Washington caselaw on the relative burdens of proof
under Washington’s anti-SLAPP statute and, in such
(d) Any oral statement made, or written statement or
other document submitted, in a place open to the public
or a public forum in connection with an issue of public
concern; or
(e) Any other lawful conduct in furtherance of the
exercise of the constitutional right of free speech in
connection with an issue of public concern, or in
furtherance of the exercise of the constitutional right of
petition.
Wash. Rev. Code § 4.24.525(2)(d)–(e).
10 PHOENIX TRADING, INC. V. LOOPS LLC
circumstances, we may look to the standards governing
California’s similarly structured anti-SLAPP statute. See
Castello v. City of Seattle, No. C10-1457, 2010 WL 4857022,
at *4 (W.D. Wash. 2010) (applying California law because
the California Anti-SLAPP Act “mirrors” Washington’s anti-
SLAPP statute (citing Aronson v. Dog Eat Dog Films, Inc.,
738 F. Supp. 2d 1104, 1110 (W.D. Wash. 2010))). In
California, a plaintiff resisting an anti-SLAPP motion “must
demonstrate that the complaint is both legally sufficient and
supported by a sufficient prima facie showing of facts to
sustain a favorable judgment if the evidence submitted by the
plaintiff is credited.” Wilson v. Parker, Covert & Chidester,
50 P.3d 733, 739 (Cal. 2002) (internal quotation marks
omitted), abrogated on other grounds as stated in Hutton v.
Hafif, 59 Cal. Rptr. 3d 109,125 (Ct. App. 2007). Thus, “[t]he
burden on the plaintiff is similar to the standard used in
determining motions for nonsuit, directed verdict, or
summary judgment.” Gilbert v. Sykes, 53 Cal. Rptr. 3d 752,
763 (Ct. App. 2007) (internal quotation marks omitted).
III.
A. Timeliness
Amercare first argues that the anti-SLAPP motion was
untimely. Under § 4.24.525(5)(a), the motion “may be filed
within sixty days of the service of the most recent complaint
or, in the court’s discretion, at any later time upon terms it
deems proper.” The operative complaint in this matter was
filed on May 21, 2010, but the anti-SLAPP motion was not
filed until February 25, 2011. The district court excused the
delay, however, because (1) Amercare did not assert any
prejudice; and (2) the parties had not engaged in any
discovery. Phoenix Trading, 2011 WL 3158416, at *6. The
PHOENIX TRADING, INC. V. LOOPS LLC 11
court also noted that most of the evidentiary materials
associated with the anti-SLAPP motion were included in the
concurrently filed cross-motions for summary judgment. Id.These were permissible factors to weigh in the timeliness
analysis; thus, the district court did not abuse its discretion by
entertaining the anti-SLAPP motion.
B. Likelihood of success
The crux of this appeal is whether Amercare met its
burden of showing a likelihood of success on the merits. The
district court’s merits determination centered on three issues:
(1) immunity under § 4.24.510; (2) the statute of limitations;
and (3) the elements of defamation.
1. Under § 4.24.510, Loops is immune for all
statements made to government agencies.
Section 4.24.510 grants “immun[ity] from civil liability”
for statements “to any branch or agency of federal, state, or
local government . . . regarding any matter reasonably of
concern to that agency.” This provision is considered
Washington’s first anti-SLAPP statute, which was later
expanded – both substantively and procedurally – by the
enactment of § 4.24.525 in 2010. See Aronson, 738 F. Supp.
2d at 1109. Immunity under § 4.24.510 does not require a
showing of good faith, Bailey v. State, 191 P.3d 1285, 1291
(Wash. Ct. App. 2008), and Washington courts describe it as
an affirmative defense. See Suggs v. Hamilton, 116 Wash.
App. 1016, No. 27141-9-II, 2003 WL 1298665, at *8
(Ct. App. 2003) (unpublished decision), rev’d on other
12 PHOENIX TRADING, INC. V. LOOPS LLC
grounds by In re Marriage of Suggs, 93 P.3d 161 (Wash.
2004).6
Amercare does not seem to dispute that § 4.24.510
attaches to Loops’ statements to government agencies and
officials, and it is clear that the provision applies. Mayor
Bloomberg, Mr. Crescenzo, and the other New York City
officials who received Loops’ statements are part of a
“branch or agency” of local government; likewise, the U.S.
Attorney and the U.S. Customs Agency are branches or
agencies of the federal government. Moreover, the
statements were “reasonably of concern” to these agencies
because they included allegations of procurement fraud,
public health threats, potential criminal conduct, and the
importation of counterfeit and/or patent-infringing products.
Accordingly, Amercare has failed to show a likelihood of
success with regard to any statements made to government
officials. We are thus left with the four categories of
statements that were made to either the press or to the IAC.
6
Under California law, the viability of an affirmative defense is properly
considered in resolving an anti-SLAPP motion. Indeed, “[s]everal
published cases have considered the validity of defenses in determining
whether the plaintiff has shown a probability of prevailing in the context
of [an anti-SLAPP motion].” Peregrine Funding, Inc. v. Sheppard Mullin
Richter & Hampton LLP, 35 Cal. Rptr. 3d 31, 43–44 & n.11 (Ct. App.
2005) (rejecting plaintiff’s contention that it had no obligation to disprove
affirmative defense in anti-SLAPP context). There is no indication that
Washington would apply a different rule, see Castello, 2010 WL 4857022,
at *4; thus, the district court properly considered the strength of Loops’
affirmative defenses in ruling on the motion to strike.
PHOENIX TRADING, INC. V. LOOPS LLC 13
2. The statute of limitations bars claims regarding
the product alteration and counterfeiting
accusations.7
(a) Background
As noted above, Amercare claims that the alteration and
counterfeiting accusations were defamatory. Loops argues
that these claims are barred by the two-year statute of
limitations. See Wash. Rev. Code § 4.16.100 (setting
limitation for libel and slander claims).8
Loops’ earliest statements regarding alteration and
counterfeiting were sent in August and September of 2007.
On October 4, 2007, Mario Crescenzo forwarded Hemming
(Amercare’s president) the August 20, 2007 letter from
Kayser, which accused Amercare of altering and
counterfeiting Loops toothbrushes. Crescenzo asked
Hemming to provide a “written response to the protest.”
Hemming responded in a letter sent sometime before October
23, 2007.9 In that letter, she denied that Amercare had altered
7
Amercare did not challenge the limitations ruling in its opening brief.
Loops addressed it briefly in its answering brief, and Amercare then
briefly addressed the issue in its reply. Accordingly, Amercare has likely
waived the right to challenge the statute of limitations ruling. Alaska Ctr.
for Env’t v. U.S. Forest Serv., 189 F.3d 851, 858 n.4 (9th Cir. 1999). As
discussed below, however, even if there was no waiver, the district court’s
limitations ruling can be affirmed on the merits.
8
Loops does not assert that claims premised on the other two categories
of statements – regarding patent infringement and lead content – were
barred by the statute of limitations.
9
Hemming’s letter to Crescenzo is not dated, but Crescenzo referred to
the letter in an October 23, 2007, email.
14 PHOENIX TRADING, INC. V. LOOPS LLC
Loops brushes “in any way.” She also stated that the
toothbrushes in Amercare’s warehouse “are in no way
counterfeit.” Despite these communications, Amercare did
not file its defamation action until February 18, 2010.
Phoenix Trading, 2011 WL 3158416, at *2.
Loops argues that Crescenzo’s letter to Hemming – and
her subsequent response – show that Amercare and Hemming
were aware of the operative facts supporting the defamation
claims as early as October 2007, and thus that the claims are
barred by the two-year limitations period.
(b) Analysis
“[A] cause of action accrues at the time the plaintiff knew
or should have known all of the essential elements of the
cause of action. The rule of law postponing the accrual of the
cause of action is known as the ‘discovery rule.’” White v.
Johns-Manville Corp., 693 P.2d 687, 691 (Wash. 1985).
“[T]he discovery rule requires a plaintiff to use due
diligence in discovering the basis for the cause of action.”
Clare v. Saberhagen Holdings, Inc., 123 P.3d 465, 467
(Wash. Ct. App. 2005). Thus, “when a plaintiff is placed on
notice by some appreciable harm occasioned by another’s
wrongful conduct, the plaintiff must make further diligent
inquiry to ascertain the scope of the actual harm. The
plaintiff is charged with what a reasonable inquiry would
have discovered.” Green v. A.P.C. (Am. Pharm. Co.),
960 P.2d 912, 916 (Wash. 1998).
On this record, Amercare has not shown a likelihood of
satisfying the statute of limitations. The Crescenzo letter –
which attached the August 20, 2007, Kayser letter – apprised
Amercare of the key allegations against it (counterfeiting and
PHOENIX TRADING, INC. V. LOOPS LLC 15
product alteration) and of the potential harm caused by these
statements (loss of the NYC-DOC contract). Indeed,
Amercare’s response letter asserted that Loops’ allegations
were false, thus demonstrating awareness of the potential
harm at that time. Accordingly, the district court properly
held that Amercare failed to show, by clear and convincing
evidence, a likelihood of success on the limitations issue.10
In light of our conclusions regarding § 4.24.510 immunity
and the statute of limitations, the only surviving defamation
claims involve the statements regarding lead content and
patent infringement that were made to either the IAC or to the
press. Neither § 4.24.510 nor the statute of limitations
applies to those statements and thus, as to those statements
only, we turn to the merits.
3. Amercare did not show a likelihood of satisfying
the elements of defamation.
“A defamation action consists of four elements: (1) a
false statement, (2) publication, (3) fault, and (4) damages.”
Duc Tan v. Le, 300 P.3d 356, 363 (Wash. 2013). “A public
official who sues for defamation may only recover damages
upon a showing that the defamatory statement was made with
10
Amercare contends that it was entitled to tolling of the limitations
period until it had acquired evidence of malice. But tolling is not
available simply because a plaintiff has not gathered all evidence
necessary to assert its strongest case; instead, the clock begins running as
soon as the plaintiff is aware of the “gravamen of the legal claim.” See
Blackledge v. City of Tacoma, 118 Wash. App. 1078, No. 28777-3-II,
2003 WL 22391010, at *3 (Ct. App. 2003) (unpublished decision)
(defamation claim accrued once plaintiff was on notice of statement in
question). Here, the gravamen of the claim was revealed in the Crescenzo
and Keyser letters.
16 PHOENIX TRADING, INC. V. LOOPS LLC
‘actual malice’ – that is, made with knowledge of its falsity
or with reckless disregard of its truth or falsity.” Herron v.
KING Broad. Co., 746 P.2d 295, 301 (Wash. 1987) (citing
N.Y. Times v. Sullivan, 376 U.S. 254, 279–80 (1964)).11
“‘Reckless disregard’ means (1) a high degree of awareness
of probable falsity, or (2) that the defendant in fact
entertained serious doubts as to the statement’s truth.” Id.(internal quotation marks, citations, and alterations omitted).
(a) Statements regarding lead content
This claim centers on the February 18, 2008, letter sent to
New York City officials and several New York Times
reporters, alleging without elaboration that Amercare
toothbrushes were “laden with lead and heavy metals” and
had “excessive amounts of lead and heavy metals.” These
allegations were made despite the results of an earlier
examination (commissioned by Loops) of the Amercare
toothbrushes, which detected some levels of lead and other
elements, but concluded that the products easily complied
with federal regulations. Although Loops has § 4.24.510
immunity for the lead-content allegations made to
government officials, see Part III.B.1, supra, that immunity
does not apply to statements made to the press. We agree,
however, with Loops that the statements were nonactionable
opinions, rather than false statements of fact. See Robel v.
Roundup Corp., 59 P.3d 611, 621 (Wash. 2002) (“Because
11
The district court concluded that Amercare qualified as a “public
figure” because the statements in question involved the manner in which
Amercare performed duties under a public contract. See Phoenix Trading,
2011 WL 3158416, at *11 (citing Corbally v. Kennewick Sch. Dist.,
973 P.2d 1074, 1078 (Wash. Ct. App. 1999)). Amercare does not contest
this ruling; thus, we assume, without deciding, that Amercare qualifies as
a public figure and therefore must show malice.
PHOENIX TRADING, INC. V. LOOPS LLC 17
expressions of opinion are protected under the First
Amendment, they are not actionable.” (quotation marks
omitted)).
“To determine whether a statement is nonactionable, a
court should consider at least (1) the medium and context in
which the statement was published, (2) the audience to whom
it was published, and (3) whether the statement implies
undisclosed facts.” Dunlap v. Wayne, 716 P.2d 842, 848
(Wash. 1986). The first two factors indicate that the
statements were nonactionable opinions. The statements
were made in the context of a business dispute in which
Loops clearly had a pecuniary interest in undoing the
Amercare contract. Under such circumstances, the press
would have been prepared for hyperbole and exaggeration.
As the Washington Supreme Court has recognized, “[i]n the
context of ongoing public debates, the audience is prepared
for mischaracterizations and exaggerations, and is likely to
view such representations with an awareness of the subjective
biases of the speaker.” Id. Indeed, before sending the
allegedly defamatory statements, Kayser acknowledged that
his conclusion about lead content was just his “opinion.”
Moreover, Kayser’s use of the terms “excessive” and “laden
with” implies a statement of opinion because they are terms
of degree and approximation. The press – an audience that is
charged with investigating the accuracy of assertions – likely
would not have perceived these exaggerations as statements
of fact. See Haueter v. Cowles Publ’g Co., 811 P.2d 231, 239
(Wash. Ct. App. 1991) (statements that are “not provable as
false” but are instead “rhetorical hyperbole” are
nonactionable). Thus, the first two factors weigh against
Amercare.
18 PHOENIX TRADING, INC. V. LOOPS LLC
The third factor cuts somewhat in Amercare’s favor, but
is not dispositive. Loops’ statements implied some
knowledge of the lead content of Amercare’s products, yet
the letter did not reference or attach the Intertek report.
Nevertheless, the context and audience are sufficient to
preclude Amercare from meeting its burden as to the lead-
content statements. Indeed, “the context and audience often
ensure that any implicit facts will be perceived as ‘merely a
characterization of those facts.’” Robel, 59 P.3d at 622
(quoting Ollman v. Evans, 750 F.2d 970, 985 (D.C. Cir.
1984)). Moreover, the letter did offer to provide
“clarification and supporting documentation” if requested.
Accordingly, Amercare did not show a likelihood of success
as to the lead-content statements.
(b) Statements regarding patent infringement
Loops obtained a patent on the Flexbrush on February 26,
2008. But even before the patent issued, Loops made several
statements suggesting that Amercare was infringing its
patent. Amercare asserts that those pre-issuance statements
were defamatory. Most of these allegations were made to
government officials and thus, as discussed above, they
cannot sustain Amercare’s defamation claims. And although
Loops made oblique references to patent infringement in
certain communications with the press and the IAC, none of
those statements was defamatory.
First, the February 18, 2008, letter – which was addressed
to both government officials and to the press – accused
Amercare of “counterfeiting . . . patented products.” But
this statement simply accuses Amercare of counterfeiting,
and not patent infringement, and thus any claim based on this
statement is barred by the statute of limitations. See Part
PHOENIX TRADING, INC. V. LOOPS LLC 19
III.B.2, supra. Second, although the May 19, 2008, letter was
sent to the press and to the IAC, its only allegation was that
“these [city] agencies knowingly infringed on our patents.”
In other words, the letter – read charitably – appears to be
accusing the New York City government (rather than
Amercare) of some form of contributory infringement. Even
if the letter could be construed as accusing Amercare of
infringement, it was sent after the patent had issued and
Amercare has not asserted that post-issuance allegations of
infringement were defamatory. Third, Loops sent a July 29,
2008, letter to the press that enclosed various filings from the
patent litigation, including the complaint and a declaration
submitted by Kayser.12 As with the May 19 letter, this
communication was sent after the issuance of the patent and
is thus nonactionable. Moreover, there is nothing defamatory
about forwarding to the press public filings from a lawsuit.
See McNeal v. Allen, 621 P.2d 1285, 1287 (Wash. 1980)
(“Allegedly libelous statements, spoken or written by a party
or counsel in the course of a judicial proceeding, are
absolutely privileged if they are pertinent or material to the
redress or relief sought, whether or not the statements are
legally sufficient to obtain that relief.”). In sum, Amercare
failed to show that any of the statements regarding patent
infringement could sustain a defamation claim.
12
Amercare puts considerable emphasis on this declaration because in
it, Kayser retracts his allegation that Amercare altered Loops brushes
(though he maintained that Amercare brushes were “counterfeit” and
“infringing”). Amercare thus argues that this concession shows that
Loops acted with malice. However, because we rely on other bases,
discussed above, for rejecting the defamation claims, we do not reach the
question of malice.
20 PHOENIX TRADING, INC. V. LOOPS LLC
IV.
Amercare’s defamation action was premised on numerous
letters that Loops sent to New York City officials, the press,
and the IAC. The district court correctly held that Amercare
could not show a likelihood of success as to any of these
statements; thus, the complaint was properly dismissed under
Washington’s anti-SLAPP statute.
The judgment of the district court is AFFIRMED.