by John E. Dannenberg

When a private prison corporation sued Director Jeanne Woodford of the California Department of Corrections and Rehabilitation (CDCR) for alleged defamatory statements made against the corporation's performance on a CDCR contract, which were made in the proper discharge of Woodford's official duties, she was held absolutely immune from suit by the privilege granted in California Civil Code § 47.

Maranatha Corrections, LLC is a private prison company with which CDCR had contracted to operate a community correctional facility in southern California. To fulfill its obligation to provide telephone services for the prisoners, Maranatha had contracted with Global Tel*Link (Global), the same contractor that CDCR uses in its prisons. As in its prison contract, Global paid a hefty kickback from excess profits built into its prisoner-only telephone rate. CDCR transfers its Global kickback funds into the Inmate Welfare Fund (IWF), allegedly to be used for prisoner programs. [The benefit to prisoners is questionable, however, since all IWF revenues first flow into the state's General Fund, from which the Legislature then appropriates prisoner-friendly expenditures in its annual budget. To the extent that IWF fund contributions exceed IWF appropriations, the excess remains in the General Fund, amounting to a clandestine tax on prisoners' families, who foot the phone bills.]

The dispute was that Maranatha pocketed these funds - totaling $1.6 million - whereas CDCR claimed them as "program income," due to be remitted to the state. When Maranatha refused to refund the money, Woodford terminated their contract and accused them of "engag[ing] in an illegal scheme of conspiracy with [the owners of Maranatha] to misappropriate the ITRF." It was umbrage over this accusatory language that gave rise to Maranatha's tort action for defamation, disparagement of services and conspiracy to libel.

The trial court ruled that (1) the defamation causes of action were protected under California Code of Civil Procedure (CCP) § 425.16 (commonly called the anti-SLAPP [Strategic Lawsuit Against Public Participation] statute) and that (2) Woodford's personal comments were protected under California Civil Code (CC) § 47 (protected speech privilege of public official when discharging her duty). On Maranatha's appeal, the court held that CCP § 425.16 had a legitimate purpose in preventing "chilling the valid exercise of the constitutional rights of freedom of speech and petition" of state officials in carrying out their official duties. It further held that Woodford's personal comments were absolutely protected speech under CC § 47 because they were made in the proper exercise of her official duties. Accordingly, the appellate court sustained the trial court's grant of CDCR's motions to strike, which had the effect of dismissing the case. All attorney fees, including those on appeal, were taxed to Maranatha.

Sadly, however, the prisoners' families, who had been bilked out of the $1.6 million, remained voiceless victims. See: Maranatha Corrections v. Department of Corrections and Rehabilitation, 158 Cal.App.4th 1075 (2008).

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