Filed 3/7/14 Rogers v. Hochshuler CA4/1

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA



MARCY ROGERS,                                                       D061633

         Plaintiff and Appellant,

         v.                                                         (Super. Ct. No. 37-2010-00099434-
                                                                                    CU-OE-CTL)
STEPHEN HOCHSHULER et al.,

         Defendants and Respondents.


         APPEAL from an order of the Superior Court of San Diego County, Timothy B.

Taylor, Judge. Affirmed.

         Lawton Law Firm and Dan Lawton for Plaintiff and Appellant.

         Chapin Fitzgerald Sullivan & Bottini, Kenneth M. Fitzgerald and Douglas J.

Brown for Defendants and Respondents.

         Plaintiff Marcy Rogers was the president and chief executive officer (CEO) of

SpineMark Corporation (SpineMark), a company that specialized in the treatment of

spinal disorders. She was fired for alleged mismanagement and allegedly taking
improper expense reimbursements. SpineMark sent a report to its shareholders detailing

the reasons for her termination.

       Rogers thereafter filed this action, alleging. among other things, the report

defamed her. SpineMark responded by filing an anti-SLAPP motion to strike her

defamation claim under Code of Civil Procedure1 section 425.16, asserting the report to

the shareholders was an issue of public interest because the report was of interest to a

limited but definable portion of the public: SpineMark's shareholders.

       The court granted the motion, striking her defamation claim and dismissing that

claim. On appeal, Rogers asserts the court erred in granting the motion to strike because

(1) a privately held company's defamatory statements contained in a confidential report to

shareholders are not protected by the anti-SLAPP statute; (2) Rogers was not a limited

purpose public figure; and (3) she made a prima facie showing of malice. We affirm.

                               FACTUAL BACKGROUND

       A. SpineMark

       SpineMark was a corporation, based in San Diego, whose goal was to generate

revenue through the treatment and research of spinal disorders. It did so through

affiliations with orthopedic surgeons and other medical professionals, teaching hospitals,

clinical researchers, and spinal implant inventors and manufacturers. SpineMark's sought

to do this by establishing "Centers of Excellence," which were spinal disorder treatment

sites where surgeons and other health care professionals would work with hospitals to


1      All further undesignated statutory references are to the Code of Civil Procedure
unless otherwise indicated.
                                             2
promote collaborative treatment approaches to improve patient outcomes and advance the

science of spinal disorder treatment. The company also formed research centers in which

physicians, inventors, researchers, and medical device companies performed clinical

research and patient trials for medical device development and the FDA approval

process.

       From May 2006 to August 2010 Rogers was SpineMark's president and CEO.

Defendants Dr. Stephen Hochschuler, Richard Lee, and John True all served on

SpineMark's board of directors (the Board).

       B. SpineMark's Concerns Regarding Roger's Performance

       By early 2010 SpineMark was struggling financially and on the brink of

insolvency. The Board was concerned about Rogers's conduct and contentiousness,

particularly in light of the company's persistent failures to meet performance targets that

she assured the Board were attainable. At a February 2010 meeting, the Board informed

Rogers that she risked dismissal if her management team failed to meet SpineMark's

financial targets or if she continued to disregard and defy the Board's directives. Rogers

acknowledged this risk of termination and the terms of her continued employment with

SpineMark through a written agreement dated March 1, 2010.

       Despite SpineMark's financial troubles, by August 2010 Rogers had charged over

$17,500 to the company for personal expenses, including hundreds of dollars for her

personal driver, thousands of dollars to purchase miles for flight upgrades and a "Girls

Night Out" dinner with her personal friends.



                                               3
       Because of the company's financial condition, in around August 2010 the Board

commissioned two reviews at SpineMark's San Diego office: (1) an operational

assessment to identify performance issues and other operational problems within the

organization, and (2) a financial review to assess discrepancies within one of the

company's accounts. The Board hired a consultant, Michael Piccirillo, to perform these

reviews. Rogers initially attempted to dissuade Piccirillo from traveling to San Diego to

do so. Once the operational assessment had been scheduled, Rogers then attempted to

obstruct it by instructing all of SpineMark's employees to stay out of the office on the day

scheduled for Piccirillo's visit, informing them that they all were receiving a "day off for

their outstanding performance." Rogers also sent a text message to her secretary, asking

her to delete her e-mail files and to put them on a disk for her to take home. However,

her secretary did not follow that instruction.

       Despite Rogers's actions in trying to avoid the reviews, both were completed. The

two reviews revealed significant problems with her management approach, decision

making, financial practices, and tactical execution within SpineMark.

       The SpineMark Operational Assessment Report (the Report) was produced

following the reviews. The Report centered on "the effectiveness and efficiency of the

operations as well as the quality and motivation of the SpineMark employees in the San

Diego office to see if there is a viable future for the company."

       The report concluded that "the company has simply been mismanaged—poor

management decision making, an unfocused strategy, lack of operational processes, and

wasteful extravagance have all contributed to the current crisis within SpineMark." The

                                                 4
Report further stated that "[i]t can be argued that motivation and communication has

actually risen since the departure of [Rogers]—with transparency and honesty has come

communication and a new team spirit."

       The Report concluded: "Given the lack of confidence that the Board of Directors,

employees and the majority of shareholders and customers now [have] in [Rogers] makes

her ability to command respect extremely questionable. Given a history of poor decision

making, her refusal to actively enact cost containment measures and her questionable

business practices it is inconceivable that SpineMark Corporation retain her services as

Chief Executive Officer."

       The Report stated: "It is very clear in discussion with [Rogers] and employees of

SpineMark that there is tremendous friction between the CEO and the Board. . . . [¶]

There is little evidence that [Rogers] follows the Board's instructions or recognizes its

authority; it appears she has even challenged the validity of the Board of Directors.

[Rogers] has tried to protect herself by: [¶] Ensuring the Board did not have a 'quorum'—

a full complement of members. [¶] Arranging the election of members who are

sympathetic to her personal cause."

       The Report concluded that "the most consistently reported 'downer' to morale is

the behavior of the CEO. 'Constantly side steps problems—prone to heavy

exaggeration—lack of timely feedback [¶] Blames others or extenuating circumstances

when things go wrong [¶] Doesn't worry when she is consistently late for work or for

meetings [¶] Releases good people who disagree with her [¶] Frequently tries to remind

people how much the company relies on her [¶] Tends to criticize staff in public rather

                                              5
than in private—can be quite abusive [¶] Likes to be in the limelight [¶] Tends to

plagiarize and take credit for other peoples' work [¶] Employs or contracts people based

on friendships or their support of her ideas—these people may or may not have the

required qualifications for the job [¶] Always out of the office—misses management

meetings.'"

       Thus, the Report not only detailed issues with her expenses, it also identified

issues centering on Rogers's management:

          "There is also considerable evidence to show that [Rogers] has
          abused her position as CEO, claiming personal expenses on the
          company, and claiming expenses which no CEO knowing the
          position of the company would claim—see Appendix K (page 48).

          "[Rogers] appears to have failed to recognize the need to change
          her personal approach and strategy in order to fix the increasing
          performance gap between fantasy and reality." (Original
          boldface and italics.)

       During the assessment, eight of the company's nine San Diego-based employees

expressed a vote of "no confidence" in Rogers. The ninth employee was unavailable to

register a vote. Creditors, including companies and physicians, had also grown

increasingly frustrated and angry with SpineMark.

       On August 9, 2010, after reviewing the Report, the Board voted to remove Rogers

as president and CEO.

       By e-mail dated September 2, 2010, SpineMark's Board notified the company's 49

shareholders of Rogers's removal from the company. That e-mail contained a copy of the

Report, and its first paragraph highlighted the Report's confidential nature:



                                             6
          "We are writing to provide information to all shareholders of
          SpineMark Corporation concerning its operation and recent events.
          As a shareholder, you have an interest in SpineMark's business.
          Because of the sensitive information contained in the attached
          report, it is intended for your eyes only and should not be
          disseminated or distributed to non-shareholders. The report reflects
          statements and information uncovered thus far from an ongoing
          investigation." (Italics added).

       Each page of the Report contained an additional disclaimer reminding the

shareholders to maintain its confidentiality: "This report and all attachments and

information contained herein are considered strictly confidential and are not to be

disclosed, disseminated, or discussed with non-shareholders."

       C. Rogers's Prior History of Similar Mismanagement

       Before Rogers moved to San Diego she was the subject of extensive news

coverage detailing her prior mismanagement of two charitable foundations in Texas. She

sued for libel, but the court granted summary judgment in favor of the newspaper, and the

Texas Court of Appeal affirmed that judgment, based on the truth of that coverage.

(Rogers v. Dallas Morning News (Tex.Ct.App. 1994) 889 S.W.2d 467, 472-473

(Rogers).) Several newspaper articles (the Dallas Morning News alone published 12 in

1991), and the libel suit Rogers brought after their publication, chronicled Rogers's

management of two charities. (See Rogers, supra, 889 S.W.2d at pp. 468, 473.) Rogers's

actions led the Texas Attorney General to open a special investigation to examine

"whether [her charity] was used as a vehicle to enable Marcy to make a profit for herself

through her private business."




                                             7
       A Texas Monthly article described Rogers's financial exploitation of two charities'

donations to assist her ascent into Dallas society. Rogers used the first charity's money to

fund a lavish lifestyle, which eventually led her to resign after being accused of "wasting

foundation money on extravagant gifts and entertainment," "diverting restricted patient

funds to meet payroll and pay overhead," "using the foundation's van as collateral on a

loan," and "hiring one of her boyfriends as a bookkeeper."

       Rogers thereafter worked for a different charity. The Dallas Morning News

investigated and revealed her mismanagement of its finances. (Rogers, supra, 889

S.W.2d at p. 470.) That investigation revealed that (1) the foundation was "disorganized

and deeply in debt"; (2) Rogers "spent more on promotions than on medical care"; (3)

"far less money actually went to helping the children than Marcy portrayed"; (4) there

was a "murky relationship between [the second charity's] finances and Marcy's personal

expenses"; and (5) Rogers "ran independent medical consulting ventures, for her own

profit, out of [her charity's] offices." Rogers "violated rule after rule about not using a

position of fiduciary responsibility within a nonprofit organization for personal benefit."

       In response, Rogers sued the Dallas Morning News for libel. The trial court

granted summary judgment for the newspaper, and this ruling was affirmed on appeal,

based on the articles' truth. (Rogers, supra, 889 S.W.2d at p. 468.) In that published

decision, the Texas Court of Appeal upheld the trial court's conclusion that the articles

accurately depicted Rogers's actions: "In essence, the [Dallas Morning] News articles

raised questions about Rogers' financial competency as [her second charity's] chief

executive officer and about whether she had misled the public about [its] charitable

                                              8
achievements. . . . [T]he [Dallas Morning News] conclusively established the substantial

truth of its articles." (Id. at p. 473.)

                               PROCEDURAL BACKGROUND

       The same day the Report was sent to SpineMark's shareholders, Rogers filed this

action against SpineMark, Hochschuler, Lee, and True. Thereafter, on September 21,

2010, SpineMark filed a chapter 7 bankruptcy petition in the Eastern District of Texas.

Rogers then obtained relief from the automatic stay to allow her to pursue claims against

the individual defendants. In May 2011 she filed her first amended complaint, which

included her defamation claim.

       The defendants responded with an anti-SLAPP motion to strike, seeking only to

strike the defamation claim. Rogers opposed the motion.

       The court granted the motion. In doing so, the court made the following findings:

           "The only modestly close question in step 1 of the analysis is
           whether the drafting and dissemination of the Report was 'in
           connection with a public issue or an issue of public interest.' The
           court finds that it was. Far from relating to purely private matters,
           the Report informed 49 board members and shareholders of the
           status of the corporation and the reasons for terminating plaintiff.
           The shareholders are members of the public, and the board owed a
           fiduciary duty to its shareholders to keep them informed. The court
           does not agree with plaintiff's apparent position that the court is
           required to wrench the challenged statements from the context of the
           Report as a whole. Nor does the court agree with plaintiff that the
           result in the Du Charme [Du Charme v. International Brotherhood
           of Electrical Workers (2003) 110 Cal.App.4th 107, 119] case
           mandates denial of the special motion to strike. Plaintiff's
           employment was terminated on August 9, 2010, and the Report was
           sent to the shareholders less than a month later. This was, it is
           undisputed, the shareholders' first notice of an event (the firing of the
           leader of a failing company) the shareholders would naturally be
           concerned about. It can reasonably be inferred that investors would

                                              9
          want to know, in detail, the reasons behind a decision of such
          import. This is particularly so in light of the controversy and debate
          engendered on this very subject just a few months before."

       Having found that the anti-SLAPP statute had been triggered, the court then found

that Rogers could not meet her burden of showing a probability of success on her

defamation claim. In doing so, the court found that Rogers would be required to prove

the alleged defamatory statements were published with malice, and that she could not

meet that burden. In this regard the court found that Rogers was at least a "limited

purpose public figure." The court also found that the Report was subject to the "common

interest privilege" under Civil Code section 47, subdivision (c).

                                       DISCUSSION

                               I. STANDARD OF REVIEW

       "Review of an order granting or denying a motion to strike under section 425.16 is

de novo. [Citation.] We consider 'the pleadings, and supporting and opposing

affidavits . . . upon which the liability or defense is based.' [Citation.] However, we

neither 'weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept

as true the evidence favorable to the plaintiff [citation] and evaluate the defendant's

evidence only to determine if it has defeated that submitted by the plaintiff as a matter of

law.' " (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.)

                                       II. ANALYSIS

       Section 425.16, subdivision (b)(1) provides that any cause of action against a

person arising from that person's exercise of free speech in connection with a public issue

is subject to a special motion to strike. As the California Supreme Court explained:

                                             10
"'The Legislature enacted section 425.16 to prevent and deter "lawsuits . . . brought

primarily to chill the valid exercise of the constitutional rights of freedom of speech and

petition for the redress of grievances." [Citation.] Because these meritless lawsuits seek

to deplete "the defendant's energy" and drain "his or her resources" [citation], the

Legislature sought "'to prevent SLAPPs by ending them early and without great cost to

the SLAPP target.'"'" (Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal. 4th at p.

278.)

          In determining whether an action is subject to a special motion to strike under the

anti-SLAPP statute, courts engage in a two-step process. First, the defendant must make

a threshold showing that the claim arises from protected activity. (Taus v. Loftus (2007)

40 Cal.4th 683, 712; Navellier v. Sletten (2002) 29 Cal.4th 82, 88.) If the defendant

makes such a showing, the burden then shifts to the plaintiff, who must demonstrate a

probability of prevailing on the claim. (Taus, at p. 712; Navellier, at p. 88.)

          Defamation causes of action are "favored" targets of anti-SLAPP motions.

(Gallimore v. State Farm Fire & Casualty Ins. Co. (2002) 102 Cal.App.4th 1388, 1400,

fn. 9.)

          A. Step 1

          In step 1, defendants are required only to make a prima facie showing that the

challenged speech fits within the scope of the statute's protection. (Wilcox v. Superior

Court (1994) 27 Cal.App.4th 809, 820, overruled on another ground in Equilon

Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68, fn. 5.) In this case, the

relevant category provides that "any other conduct in furtherance of the exercise of the

                                               11
constitutional right of petition or the constitutional right of free speech in connection with

a public issue or an issue of public interest." (§ 425.16, subd. (e), cl. (4).) This provision

of the anti-SLAPP statute applies to Rogers' defamation cause of action.

       1. The Extent of the Report's publication

       Rogers asserts that defendants are not entitled to anti-SLAPP protection because

they published the Report to "only 49 shareholders" and did so in a private, confidential

manner. Rogers contends "[n]o reported case has extended anti-SLAPP protection to [a]

private and confidential corporate report distributed to so few recipients." We reject this

contention.

       The scope of the publication does not control whether a statement concerned a

public issue so as to qualify as protected speech: "Regardless of the scope of publication,

protection under the anti-SLAPP statute turns on whether the activity of the defendant

involves the right of petition or free speech in connection with a public issue." (Dyer v.

Childress (2007) 147 Cal.App.4th 1273, 1282, italics added.) "[T]he question

whether . . . statements concerned a matter of public interest cannot be determined on the

basis of media coverage, notoriety or potential newsworthiness." (Zhao v. Wong (1996)

48 Cal.App.4th 1114, 1131-1132, disapproved on other grounds in Briggs v. Eden

Council for Hope & Opportunity (1999) 19 Cal.4th 1106.)

       Indeed, the anti-SLAPP statute has been applied in cases involving private

communications to just a single person. (Ruiz v. Harbor View Community Assn. (2005)

134 Cal.App.4th 1456, 1467-1470.)



                                              12
       What is important is the substance of the communication. The number of people

to whom the defendants sent the Report, and its confidential status, have no bearing on

the anti-SLAPP statute's application.

       2. Ongoing controversy, dispute, or discussion within a limited but definable
portion of the public

       Rogers asserts that the statements made in the Report were not subject to anti-

SLAPP protection because they (1) did not directly affect a large number of people

beyond the direct participants; and (2) were not a topic of widespread, public interest.

This contention is unavailing.

       To fall within the protection of the anti-SLAPP statute, it is not necessary for an

issue to be of interest to the public at large. A statement satisfies the statute's public

issue/issue of public interest requirement where it 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), . . . [and] occur[s] 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 v.

International Brotherhood of Electrical Workers, supra, 110 Cal.App.4th at p. 119, fn.

omitted (Du Charme).)

       SpineMark's shareholders had a sufficient interest in SpineMark's management

and operations for the Report, which occurred in the context of such an ongoing

discussion, to constitute protected speech. (See Damon v. Ocean Hills Journalism Club

(2000) 85 Cal.App.4th 468, 474-475 [holding that allegedly defamatory statements


                                              13
pertain to an issue of public interest where they concerned the manner in which a

residential community would be governed].)

      The company's performance and Rogers's suitability as SpineMark's CEO were

very much in discussion, and very much in debate, before the Report was prepared or

distributed. The discussion about the company's performance under her leadership

extended beyond SpineMark's Board and specifically involved SpineMark's shareholders.

      Thus, Rogers's performance as CEO was a matter of discussion and debate within

a limited but definable portion of the public; i.e., the community of SpineMark's

shareholders. The Report was part of that ongoing discussion and was, therefore, a

statement of public concern within the meaning of the anti-SLAPP statute.

      On appeal, Rogers acknowledges the Du Charme rule provides anti-SLAPP

protection to communications that were not of interest to the public at large. However,

she contends it cannot apply here because her termination ended any ongoing discussion

before the respondents published the Report and because the rule should extend only to

labor unions and homeowners associations. These contentions are unavailing.

      The Report itself reflects the fact there was an ongoing discussion, as most of its

57 pages are dedicated to a discussion of SpineMark's strategy and performance.

      Even if this discussion within the community of SpineMark's shareholders

pertained exclusively to Rogers and her performance, as she contends, there is no reason

that her termination would have ended it. Media coverage of corporate executives

regularly demonstrates this, with the discussion about the underpinnings and

consequences of an executive's departure often lingering for months after the fact. The

                                            14
termination of an executive is in this regard very different from the termination of a lower

level manager, such as the assistant manager whose termination in Du Charme ended any

discussion, debate, or controversy in which union members would have had an interest in

participating. (Du Charme, supra, 110 Cal.App.4th at p. 118.)

       In support of her position Rogers relies on Rivero v. American Federation of State,

County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, in which a

union published unsubstantiated allegations of wrongdoing that earlier led to the firing of

a janitor responsible for supervising eight other janitors. (Id. at p. 916.) There, the Court

of Appeal held that "unlawful workplace activity below some threshold level of

significance is not an issue of public interest, even though it implicates a public policy."

(Id. at p. 924.) However, Rivero is distinguishable.

       Here, the Report did not limit its discussion to "unlawful workplace activity." As

the trial court put it: "Far from relating to purely private matters, the Report informed 49

board members and shareholders of the status of the corporation and the reasons for

terminating plaintiff. The shareholders are members of the public, and the board owed a

fiduciary duty to its shareholders to keep them informed."

       Terry v. Davis Community Church (2005) 131 Cal.App.4th 1534 (Terry) is

instructive. There, two church youth group leaders sued a church, pastor, and church

leaders for defamation after the defendant distributed a report to parents of youth group

members, detailing allegations that the plaintiffs had engaged in an inappropriate

relationship with a youth group member. (Id. at pp. 1539-1541.) Although the plaintiffs

resigned their positions and withdrew from church membership, the respondents

                                             15
published the subject report the following week, when it was discussed with parents of

youth group members in closed meetings of the church, and did so twice again three days

after that. (Id. at pp. 1541-1543.)

       Distinguishing Du Charme and Rivero, the Court of Appeal rejected the plaintiffs'

argument that there was no ongoing controversy, dispute, or discussion because they had

already resigned from the youth program and from church membership by the time of

publication. (Terry, supra, 131 Cal.App.4th at pp. 1549-1550.) As the Court of Appeal

in Terry explained, "plaintiffs did not have the power to foreclose discussion by

resigning." (Id. at p. 1550.) The court went on to explain that although the plaintiffs'

resignation eliminated the need for a church trial, it did not eliminate the parents' interest

in determining the full extent of the plaintiffs' wrongdoing and whether their own

children may have been the subject of inappropriate contact by the plaintiffs. (Ibid.)

       Like the plaintiffs' resignation in Terry, although Rogers's departure eliminated the

need to determine whether she should continue as SpineMark's CEO, it did not foreclose

discussion of her tenure. Just as the parents in Terry had a continued interest in

ascertaining the full extent of the plaintiffs' misconduct, SpineMark's shareholders had a

continued interest in assessing the impact of Rogers's mismanagement of the company.

That assessment would naturally have included, among other things, continued discussion

about the extent of any misconduct on Rogers's part; the consequences of such

misconduct on SpineMark; and what actions, if any, the company should take as a result.

All of these things "embod[y] the public policy of encouraging participation in matters of



                                              16
public significance" (Du Charme, supra, 110 Cal.App.4th at pp. 118-119, fn. omitted)

and thus justify anti-SLAPP protection.

       In a declaration filed in support of the motion to strike, Kevin Liang, SpineMark's

vice president of research and education, confirmed that Rogers's performance as CEO

was a regular subject of discussion at SpineMark through the company's bankruptcy

filing in September 2010, several weeks after Rogers's termination.

       Indeed, even Rogers's own conduct demonstrates that the discussion was ongoing

after her termination. On the same day the respondents published the Report to the

company's shareholders, Rogers filed this lawsuit, alleging that SpineMark and its

directors had wrongfully terminated her. By virtue of her own lawsuit, there was still a

controversy surrounding her performance as CEO and the company's grounds for

terminating her employment. Rogers cannot contend that her termination closed any

discussion within the community of SpineMark shareholders regarding her performance

when she still believed the issue was the subject of controversy.

       3. The Du Charme rule is not limited to unions and homeowners associations

       Seeking to avoid the Du Charme rule, Rogers asserts "appellate courts have only

extended this special category of anti-SLAPP protection to two types of communities:

labor unions and homeowners associations ('HOAs')." We reject this contention. The

Terry case, discussed, ante, involved a church and the alleged misconduct of two youth

group leaders, not a labor union or HOA. (Terry, supra, 131 Cal.App.4th 1534.)

       Moreover, as the Court of Appeal in Du Charme noted, the rule is not so limited,

but is intended for any situation involving "a limited, but definable portion of the public

                                             17
(a private group, organization, or community)." (Du Charme, supra, 110 Cal.App.4th at

p. 119.) A corporation with multiple shareholders, like SpineMark, constitutes a limited

but definable private organization, and thus falls within the scope of this rule.

       4. SpineMark and Rogers were subjects of public interest within the meaning of
the anti-SLAPP statute

       Even if there had not been such an ongoing controversy, dispute, or discussion

within the SpineMark community as to SpineMark's performance under Rogers's

leadership, the allegedly defamatory statements would still fall within the anti-SLAPP

statute's protection because Rogers and SpineMark were themselves subjects of public

interest. The definition of "public interest" within the meaning of the anti-SLAPP statute

has been "broadly construed" to include not only governmental matters, but also private

conduct that either impacts a broad segment of society or that affects only a particular

community. (Kurwa v. Harrington, Foxx, Dubrow & Canter, LLP (2007) 146

Cal.App.4th 841, 846.) The most commonly articulated definitions of statements made in

connection with a public issue focus on whether: "[¶] (1) The subject of the statement or

activity precipitating the claim was a person or entity in the public eye. [Citation.] [¶]

(2) The statement or activity precipitating the claim involved conduct that could affect

large numbers of people beyond the direct participants. [Citation.] [¶] (3) The statement

or activity precipitating the claim involved a topic of widespread public interest."

(Commonwealth Energy Corp. v. Investor Data Exchange, Inc. (2003) 110 Cal.App.4th

26, 33.)




                                             18
       SpineMark itself was the subject of public interest and, as the company's CEO,

Rogers's conduct affected a large number of people. By the time of the Report's

publication, SpineMark had 49 shareholders and had grown in five years to become a

company with approximately $20 million in revenue. Beyond these shareholders and

SpineMark's 26 employees, the threat posed by Rogers's mismanagement also reached

health care professionals, patients, researchers, and FDA-regulated medical device

companies that depended on the company. In addition to having established spine

research organization sites across North America and a medical conference center that

provided surgical training programs, SpineMark had developed an international network

of Centers of Excellence, to which SpineMark provided services towards the

development of multidisciplinary spine centers. Through these centers, SpineMark

conducted business with numerous physicians and medical device companies, including

publicly traded companies like Medtronic. The company's poor performance under

Rogers's leadership affected over 100 patients in research trials and threatened the

viability of ongoing clinical research for 19 medical device companies undergoing the

FDA approval process.

       In addition to her conduct as SpineMark's CEO affecting a large number of people,

Rogers, herself, was also in the public eye. A statement is "in the public interest" within

the meaning of the anti-SLAPP statute when it involves a person who is in the public eye.

(Nygard, Inc. v. Uusi-Kerttula (2008) 159 Cal.App.4th 1027, 1042 [statements concerned

"an issue of public interest" because they pertained to a prominent Finnish businessman

with some celebrity in his home country].)

                                             19
       By the time of the Report's publication, Rogers was such a person. She had

appeared as a guest on the television show Donahue, and she had been plugged in the

nationally syndicated column "Dear Abby." She was an influential editor, author,

lecturer, sponsor of Congressional action, guest of the First Lady of the United States,

and a "key opinion leader" who had won numerous awards for her important work in

medicine.    Touting her public significance as a widely known and sought-after

commentator, public speaker, and author, Rogers's personal website

(http://www.marcytrogers.com) stated:

            "[Rogers] has been selected as a Feature Editor for both www.Spine-
            health.com, and www.spineuniverse.com, the two leading resources
            for information on spine care for patients and physicians. In
            addition, [Rogers] has been an invited lecturer to dozens of medical
            societies and company meetings, including Philips, the North
            American Spine Society, American Society for Interventional Pain
            Physicians, International Congress of Plastic Surgery, American
            Cleft Palate Association, Sofamor Danek, Depuy Spine, Kimberly
            Clark, and a regular speaker at Active Communications
            International's Spine and Pain Symposiums. She has co-authored
            book chapters and has been published in leading medical
            publications in the fields of spine, pain and craniofacial surgery."

       With regard to her work at SpineMark, Rogers sought public attention and

favorable publicity through her website:

            "With [Rogers] as President and CEO, SpineMark Corporation has
            become a leader in the planning, development, marketing and
            management of successful Spine Centers of Excellence in hospitals,
            surgery centers and freestanding institutions. [¶] Under [Rogers's]
            direction, SpineMark consulted on, developed, implemented or
            managed 22 Centers of Excellence across the United States, with
            additional Spine Center projectsopening [sic] in Mexico, Spain,
            Turkey and the Netherlands through SpineMark International."



                                            20
          Her website concluded by stating: "[Rogers] has established herself as a key

opinion leader and development specialist among her clients, professional colleagues and

peers."

          As we have discussed, ante, Texas Monthly magazine and the Dallas Morning

News also believed Rogers, and her pattern of mismanagement and misappropriation of

organizational funds for personal use, were of public interest, enough so that they

published extensive articles about her. As noted, ante, the Dallas Morning News's

successful defense of her defamation action arising from its articles even resulted in a

published court opinion. (Rogers, supra, 889 S.W.2d 467.) As the Court of Appeal held

in Sipple v. Foundation for Nat. Progress (1999) 71 Cal.App.4th 226, 247-248, the anti-

SLAPP statute covers statements made about an individual who "has been profiled,

quoted, interviewed, and has used the media for [her] professional advantage many

times."

          B. Step 2

          Because defendants have made a prima facie showing that the Report is protected

speech, Rogers was required to demonstrate a probability of prevailing on her defamation

cause of action to defeat the respondents' motion. (Equilon Enterprises v. Consumer

Cause, Inc., supra, 29 Cal.4th at p. 67.) In assessing whether a plaintiff has shown a

probability of prevailing, courts consider the pleadings and evidence submitted by both

the plaintiff and the defendant. (Christian Research Institute v. Alnor (2007) 148

Cal.App.4th 71, 80.)



                                              21
       Although "the court does not weigh the credibility or comparative probative

strength of competing evidence, it should grant the motion if, as a matter of law, the

defendant's evidence supporting the motion defeats the plaintiffs attempt to establish

evidentiary support for the claim." (Wilson v. Parker, Covert & Chidester (2002) 28

Cal.4th 811, 821.) In addition, a plaintiff cannot rely on the allegations of his or her

complaint, but must present competent and admissible evidence showing that he or she

has a legally sufficient defamation claim that is "substantiated." (Tuchscher Development

Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1236.)

       As Rogers acknowledges, her defamation claim is subject to the defense of

common interest privilege as set forth in Civil Code section 47, subdivision (c) and to

overcome that privilege she must demonstrate that the statements in the Report were

made with malice. However, Rogers asserts the court erred in finding that she did not

make a prima facie case of malice to overcome that common interest privilege. This

contention is unavailing.

       "A privileged publication or broadcast is one made: [¶] (c) In a communication,

without malice, to a person interested therein, (1) by one who is also interested, or (2) by

one who stands in such relation to the person interested as to afford a reasonable ground

for supposing the motive for the communication to be innocent, or (3) who is requested

by the person interested to give the information." (Civ. Code, § 47, subd. (c), italics

added.)

       The malice needed to overcome a qualified privilege is "actual malice." (Agarwal

v. Johnson (1979) 25 Cal.3d 932, 944, overruled on another ground in White v. Ultramar

                                             22
(1999) 21 Cal.4th 563, 574.) To demonstrate actual malice, a plaintiff must prove the

subject publication was "motivated by hatred or ill will toward the plaintiff or by a

showing that the defendant lacked reasonable grounds for belief in the truth of the

publication and therefore acted in reckless disregard of the plaintiff's rights." (Hailstone

v. Martinez (2008) 169 Cal.App.4th 728, 740.) This standard of actual malice is a

"'daunting one,'" focusing solely on the defendant's subjective state of mind at the time of

publication and requires more than mere negligence or even "'gross or . . . extreme

negligence.'" (Sutter Health v. UNITE HERE (2010) 186 Cal.App.4th 1193, 1210-1211.)

       1. Clear and convincing evidence of malice

       As we have discussed, ante, Rogers qualifies as a "limited purpose public figure."

As such, she must "prove by clear and convincing evidence that [the] alleged defamatory

statement[s were] made with knowledge of falsity or reckless disregard for truth."

(Ampex Corp. v. Cargle (2005) 128 Cal.App.4th 1569, 1577.) "To meet the clear and

convincing standard, the evidence must be such ' "as to command the unhesitating assent

of every reasonable mind." ' [Citation.] [¶] The reckless disregard test requires a high

degree of awareness of the probable falsity of the defendant's statement. . . . This is a

subjective test, focused on the defendant's attitude toward the veracity of the published

material, as opposed to his or her attitude toward the plaintiff." (Id. at p. 1579.)

       In addressing the malice issue, Rogers focuses solely on her reimbursements,

asserting that if SpineMark had checked with their chief financial officer, Richard

Guzman, they would have learned that the reimbursements were approved by him.



                                              23
However, she ignores that portion of the Report concerning SpineMark's performance

under Rogers's leadership and her performance as the company's CEO.

      Moreover, this is not evidence of malice. "[Malice] is not measured by what a

reasonably prudent person would have published, or would have investigated before

publishing." (Sutter Health v. UNITE HERE, supra, 186 Cal.App.4th at pp. 1210-1211.)

      Additionally, the evidence shows that the defendants did conduct an investigation.

Piccirillo wrote the Report after conducting an operational assessment of SpineMark that

included a physical visit to the company's San Diego office, interviews with the

company's San Diego employees, telephone discussions with the company's Plano

employees, and a review of the company's books and records. Regarding the Report's

statements concerning personal expenses Rogers charged to the company, Piccirillo

obtained the data from SpineMark's bookkeeper and Rogers's executive assistant, and he

supported those statements with a three-page appendix detailing her 2010 personal

expenses, while expressly disclaiming, "no detailed checks have been made into [her]

expenses [for] 2007, 2008, and 2009."

      Moreover, in criticizing defendants' failure to consult with Guzman before

publishing the Report Rogers ignores a key fact contained in his declaration in support of

the anti-SLAPP motion: he resigned as SpineMark's CFO effective July 31, 2010. This

was before the defendants retained Piccirillo in August 2010 to conduct the operational

assessment that led to the Report's eventual publication on September 2, 2010.

      Because Rogers has failed to demonstrate that the defendants were aware the

Report was probably false, she cannot show that defendants acted with malice.

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                                     DISPOSITION

      The order granting defendants' motion to strike the defamation claims is affirmed.

Defendants shall recover their costs on appeal.


                                                                              NARES, J.

WE CONCUR:


McCONNELL, P. J.


McDONALD, J.




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