by David M. Reutter

A California federal district court held that CoreCivic, Inc., must pay attorney fees in a defamation lawsuit. The court held the calculation of fees in abeyance until the resolution of appeals related to the dismissal and whether it could award fees.

The court’s April 6, 2021 order was in response to a motion for “attorney fees under California’s anti-SLAPP statute after the complaint for defamation was lost at the pleading stage.” CoreCivic runs private prisons and detention centers. It sued Morgan Simon and her Candide Group, LLC, a firm that promotes socially responsible investing.

“Mixing reporting, advocacy, and self-promotion, her articles focused on the role of activist groups, like the #FamiliesBelongTogether movement and her own investment firm, in pushing for banks to stop investing in the private prison industry,” the court wrote, noting that she wrote the articles as a senior contributing writer for Forbes magazine. “Simon’s articles named CoreCivic in the controversy surrounding the separation of family members at the border.”

CoreCivic sued for defamation. Simon and Candide moved to dismiss under California’s anti-SLAPP statute. That law allows a “special motion” to strike when a plaintiff brings a “cause of action against a person arising from any act… 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.” See: Section 425.17 of the California Code of Civil Procedure.

It exempts commercial defendants whose speech was made in the context of comparative advertising. Commercial defendants are protected if they are a reporter, researcher, nonprofit, or creator or publisher of “dramatic, literary, musical, political, or artistic artwork.” Simon qualified for protection due to her connection with a periodical publication.

Once a defendant implicates a right of petition or free speech in connection with a public issue, the burden shifts to the plaintiff to prove a “probability” that they can prevail on the claim. CoreCivic failed to meet that burden. After final judgment was entered against it, Simon and Candide moved for attorney fees under the anti-SLAPP rule.

In a California court, the issue would be clear cut in favor of the defendants. However, the case was pending in federal court. The question remained as to the effect of anti-SLAPP rules in federal court. The Second Circuit Court of Appeals held that such rules have no effect on a federal lawsuit. The district court, however, found that the Ninth Circuit has “blessed” application of California’s anti-SLAPP statute. See: Planned Parenthood Fed’n of Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828, amended 897 F.3d 1224 (9th Cir. 2018).

The district court further noted that CoreCivic admitted it “incarcerated the parents after their children had been taken from them. In light of this admission, the Court dismissed the case inasmuch as the alleged defamation was true: CoreCivic admitted that it had, indeed, facilitated the family-separation policy by holding parents of the separated families (even though it had not held the children).”

The recovery of attorney fees “is automatic for an alleged defamer who prevails where the speech touches upon a public issue.” As such, the Court held Simon and Candide were entitled to the award of attorney fees. It, however, took issue with the hourly rate charged because it was “inflated way beyond the amount charged to the client.” The Court also found defense counsel spent too long on the motion to strike, “especially in light of the experience and expertise of the attorneys which should have allowed them to make quicker work of this matter.”

While the Court held the defendants were entitled to attorney fees, it held “in abeyance the final calculation of fees pending resolution of the current appeal.” See: CoreCivic Inc. v. Candide Grp. LLC, 2021 U.S. Dist. LEXIS 66855 (N.D. Cal. Apr. 6, 2021).

On July 14, 2021, the Court of Appeals for the Ninth Circuit dismissed the appeal holding it lacked jurisdiction because the appealed order was neither final nor appealable. See: CoreCivic Inc. v. Candide Grp. LLC, 2021 U.S. App. Lexis 20883. 

Related legal cases