Laguna Publishing v. Golden Rain Foundation

131 Cal.App.3d 816 (1982)

Summary by Mary M. Howell, Esq.:

Facts

Association allowed one neighborhood newspaper to be distributed to residents of its gated community, but refused to allow a competing newspaper access for distribution. The competing newspaper argued that such behavior violated its constitutional rights.

Held

For competing newspaper. Without analyzing the state action aspect of the case, the court held that allowing one newspaper to be circulated while preventing the other constituted wrongful discrimination.

NOTE

It is uncertain what continuing validity Laguna Publishing has, given the Supreme Court’s decision in Golden Gateway.

*** End Summary ***

Laguna Publishing v. Golden Rain Foundation

131 Cal.App.3d 816 (1982)

820*820 COUNSEL

W. Mike McCray for Plaintiff and Appellant.

Pacht, Ross, Warne, Bernhard & Sears, Michael D. Koomer, Scott Z. Zimmermann and Carol A. Schneiderman for Defendant and Respondent.

OPINION

McDANIEL, J.

In this case we decide that it violated the plaintiff’s free-speech, free-press rights secured under article I, section 2 of the California Constitution when unsolicited, live-carrier delivery of plaintiff’s giveaway newspaper was made the object of discriminatory exclusion from Rossmoor Leisure World by defendant Golden Rain Foundation of Laguna Hills. The extent to which plaintiff is entitled to damages, if any, beyond injunctive relief lifting such exclusion, must be resolved at a new trial of issues as later defined.

The action in the trial court was brought by Laguna Publishing Company (plaintiff) against assorted defendants after plaintiff’s give-away newspaper, the Laguna News Post, was excluded by way of a denial of entry into Rossmoor Leisure World for unsolicited, free delivery to the residents of Leisure World, a private, residential, walled community where only resident-approved access is permitted through guarded security gates. The defendants named included Golden Rain Foundation ofLaguna Hills (Golden Rain), the entity which finally decided to exclude plaintiff’s newspaper from Leisure World, and which owns the streets, sidewalks, and other common areas within its boundaries for the benefit of its residents. Also named as a defendant was Golden West Publishing Corp. (Golden West), publisher of the Leisure World News, a givea-way type newspaper which is and for years has been accorded the exclusive privilege of entry into Leisure World for free, unsolicited delivery to its residents.

821*821 The fourth amended complaint upon which the case went to trial, undertook to plead several theories of entitlement to relief. Plaintiff alleged that Golden Rain and Golden West had engaged in a conspiracy in restraint of trade, violative of the Cartwright Act, and that Golden West had also engaged in certain conduct against plaintiff violative of the Unfair Trade Practices Act.

For its part, Golden West cross-complained against plaintiff and its principal, Vernon R. Spitaleri, alleging the latter’s violations of the Cartwright Act, the Unfair Trade Practices Act, in addition to other conduct allegedly amounting to unfair competition under the common law.

The respective claims noted were all tried to a jury which resolved the issues raised by the complaint against the plaintiff and resolved those raised by the cross-complaint in favor of Golden West. The latter was awarded $5,000 compensatory and $50,000 exemplary damages.

Otherwise, and of central importance here, the plaintiff asserted that the exclusion of its newspaper from Leisure World constituted a deprivation of its free speech and free press rights secured to it under either the federal or state Constitutions. Based on such assertion, plaintiff prayed for an injunction to lift such exclusion and for money damages either under the federal civil rights statute, 42 United States Code section 1983, or on the basis of a claimed “self-executing” modality under article I, section 2, of the California Constitution.

Procedurally, the manner in which the constitutional issues were presented and resolved was somewhat complex. Nine months before trial, the court granted a defense motion that certain issues of fact be deemed without substantial controversy. They are:

“1. Leisure World of Laguna Hills is a private residential housing project, consisting of dwelling units, streets, maintenance and, other facilities.

“2. All of the real property within Leisure World is privately owned and is used only for private purposes.

“3. Leisure World is not open to the general public.

822*822 “4. Entry into Leisure World is restricted to authorized persons who must pass through gates guarded by private security guards.

“5. Since the inception of Leisure World in 1964, only the owners or occupants of real property within Leisure World, or their invitees, have been authorized to enter Leisure World.[^[1]]

“6. There are no business districts or commercial facilities or areas such as stores, shopping centers, office buildings, or the like within Leisure World, nor have there ever been any such districts, areas, or facilities therein.

“7. Beginning in late 1967, and continuing to date, plaintiff has been denied permission to enter Leisure World for the purpose of delivering its newspapers by carrier boy on an unrequested basis.”

Item 8, argued as a part of such motion to the effect that exclusion of the Laguna News-Post from Leisure World did not violate plaintiff’s constitutional rights, was excepted from the order granting the motion. However, the court did grant a later defense motion for an order that plaintiff refrain, in the presence of the jury, from making any reference to its claim of free speech abridgement.

The net legal effect of the later order was the same as if the court had sustained a general demurrer to plaintiff’s theory of relief based upon a claimed violation of its constitutional rights of free speech and free press; hence, the jury trial of those issues arising under the respective allegations characterized as violations of the Cartwright Act and the Unfair Trade Practices Act proceeded without recognition of the claimed deprivation of plaintiff’s constitutional rights.

After the jury brought in its verdict, the court, sitting in equity, took further evidence on plaintiff’s application for an injunction and then denied such application. In support of that denial, it made extensive findings of fact and conclusions of law. In this connection, it is appropriate to observe, in terms of extrinsic, observable events, that there was little if any conflict in the evidence. The dispute between the parties lay823*823 in their divergent views of the legal consequences of those events which all agree happened, and so the findings add nothing to aid our decisional task in terms of the customary office fulfilled by findings of fact as part of a record on appeal. In other words, the constitutional issue, as defined hereinafter, is solely one of law with reference to which the jury verdict and the court’s findings have no significance whatsoever. That legal issue derives from the order in limine which emasculated plaintiff’s deprivation of constitutional rights theory.

The plaintiff and the cross-defendants appealed from the judgment, and, in the opinion filed in our initial effort to dispose of the appeal, we held that plaintiff was entitled to an injunction by the terms of which it would be accorded access to Leisure World on the same terms and conditions as those enjoyed by the Leisure World News. We held further that plaintiff was entitled to a limited new trial on those issues of fact arising from its exclusion, solely in light of state statutes proscribing conspiracies in restraint of trade, the same considered in light of plaintiff’s unconstitutional exclusion from Leisure World. Otherwise, the judgment as it reflected the jury’s verdict was affirmed.

Both defendants petitioned for rehearing. We granted those petitions; the matter was reargued and submitted for decision.

While the case was under submission, counsel for Golden West informed us that the appeal against it would soon be dismissed.^[2] That has occurred, and so only Golden Rain continues to oppose the appeal.

In the opinion filed following the first rehearing, we reached the same result as the first time, i.e., reversing with directions: (1) to grant plaintiff’s application for equitable relief; and (2) to conduct a further trial of the Cartwright Act issues in light of the unconstitutionality of plaintiff’s exclusion from Leisure World. Both sides again petitioned for 824*824 rehearing, and both petitions were again granted. Thus, the matter is once more before us for disposition.

THE CONSTITUTIONAL ISSUE

I

The complexity of the procedures in the trial court by which the constitutional issue was presented and resolved has necessarily resulted in prolix assignments of error relative to that issue. The plaintiff contends that the trial court’s ruling of December 5, 1977, which precluded it from arguing or in any way adverting in the presence of the jury to its claim of constitutional deprivation was improper because Golden Rain’s exclusion of plaintiff’s newspaper from Leisure World was tantamount to state action which operated to abridge plaintiff’s rights of free speech and free press. This contention proceeds upon two theories under which the exclusion from Leisure World is characterized by plaintiff as impermissible state action: (1) Leisure World is the legal equivalent of a municipality under the “company town” cases; (2) Leisure World’s development and construction were accomplished only as a consequence of federally guaranteed financing, with the result that its actions partake of a public quality.

In our view, it more simply frames the issue to ask, on the undisputed extrinsic facts presented by this record, if plaintiff’s free speech and free press rights, secured under either the state or federal Constitutions, were abridged by the actions of Golden Rain in excluding plaintiff’s employees from Leisure World and thereby preventing the unsolicited, live carrier distribution of plaintiff’s newspaper, theLaguna News-Post, to the residences in Leisure World.

II

The trial court reserved its ruling on any right to an injunction until after the jury phase of the trial had been completed. That the trial court eventually denied plaintiff’s application for an injunction, which would have forced Golden Rain to cease its exclusion of the Laguna News-Post from unsolicited, live carrier distribution within Leisure World, necessarily indicates that nothing which the trial court received in the way of evidence during the five-month, jury trial or during the additional period thereafter, during which it took evidence, operated in 825*825 its view to demonstrate any deprivation of plaintiff’s constitutional rights.

This observation is confirmed by certain of the trial court’s conclusions of law reached after promulgating 23 paragraphs of findings extending to over a dozen pages of the record. Such conclusions are: (a) “Plaintiff has no federal or state constitutional right to enter Leisure World of Laguna Hills to distribute its newspaper by carrier to occupants of dwelling units therein without any request or subscription therefor by such occupants”; (b) “Plaintiff has no federal or state constitutional right to enter Leisure World of Laguna Hills to distribute its newspapers by carrier to the occupants of dwelling units without any request or subscription therefor by such occupants when Golden Rain Foundation of Laguna Hills, acting within the scope of its authority, in behalf of its members, has denied Plaintiff permission to enter to make such distribution.”

In our view, those conclusions are wrong insofar as the state Constitution is concerned. As a consequence, plaintiff is entitled to an injunction which will terminate its exclusion from Leisure World and thus enable it to distribute its newspaper there upon the same terms and conditions as the Leisure World News is now distributed therein,^[3] subject nevertheless to such reasonable regulations as to time, place, and manner as Golden Rain may elect to adopt to regulate disposition of all newspapers within Leisure World.

III

What then are the facts which are material to the question of whether plaintiff’s free speech and free press rights were abridged when it was excluded by Golden Rain from distributing its unsolicited, give-away newspaper to the residences of Leisure World?

Before answering that question, we are constrained to observe again, despite the evidence presented to the court in the second, nonjury phase of the trial, following which extensive findings were made, that on the 826*826 constitutional issue this is not an evidence case. The material, extrinsic facts are not disputed. In effect, the trial court ruled as a matter of law, without the need to resolve any issues of fact, that no constitutional deprivation had occurred as a consequence of the exclusion of plaintiff’s newspaper by Golden Rain from Leisure World.^[4]

From this perspective, we shall recite the undisputed facts which provide the basis for our reversal. Our factual recitation of what we see to have been significant in reaching our decision, of course, starts with the several items settled nine months before trial as being without substantial controversy, with the exception of course of No. 5 which is wholly without any evidentiary support in the record.

Supplementing the six valid items noted, the record shows that the entire residential community of Leisure World, consisting of both condominiums and cooperative housing units, is comprised of roughly contiguous groups of residents sometimes referred to as “mutuals.” These mutuals are also organized as nonprofit corporations and are responsible for the actual maintenance and preservation of the residential property within their respectively defined areas. As already noted, Golden Rain owns all the common areas within Leisure World, including the streets and sidewalks. As a consequence, Golden Rain is responsible for the maintenance and upkeep of these non-residential areas for the benefit of all the residents of Leisure World. All residents of Leisure World are not members of Golden Rain. Its members must apply for and be accepted for membership, such acceptance being subject to assuming certain financial obligations.

To accomplish their respective maintenance and upkeep objectives, both the mutuals and Golden Rain early on contracted with yet another legal entity to perform the actual work functions. From 1964 to the end of 1972 the entity with such contracts was the Leisure World Foundation (hereinafter LWF), and, since 1972, Professional Community Management, Inc.

827*827 Although not a prescribed part of its duties under its contract with Golden Rain, LWF, from the outset of its management of Leisure World, published and delivered,unsolicited, to each residence therein a community-type newspaper under the banner of the Leisure World News which Golden Rain has steadfastly described as a “house organ.” LWF continued to do this until it sold the Leisure World News to defendant Golden West, initially incorporated as Birchall, Smith & Weiner, Inc., by the young men, who, as employees of LWF, had performed the functions necessary to get out the paper, including the sale of advertising.

During the beginning years of its publication by LWF, the Leisure World News was a losing effort financially. Some of the costs of printing and distributing the paper were defrayed by the sale of advertising, but in the earlier years of its publication the larger share of such costs was borne as a direct expense by LWF. As time passed, this direct expense was increasingly offset by advertising revenues, but even as late as 1967 the deficit for an operation which brought in $138,390 was still $6,055, reflecting expenses of $144,445.

In 1967, the two young men who had been hired by LWF to perform the task of putting out the Leisure World News discussed with Edward Olsen, president of LWF, the possibility, while continuing to work for LWF, of their being accorded permission by their employer to publish for their own account a so-called “shopper” for distribution to persons outside Leisure World.

Permission to launch the new venture was granted; thereupon Carlton Smith and Richard Birchall commenced publication of the News Advertiser for circulation outside Leisure World. Smith and Birchall were allowed to maintain an office for the News Advertiser in the same space provided them by LWF to enable them to perform their duties in putting out the Leisure World News. Advertising in the News Advertiser was sold to many of the same businesses as those who bought space in the Leisure World News. This advertising was sold at the same time by the same salesmen who represented the Leisure World News.

The consequence of this was that the Leisure World News defrayed and/or absorbed many of the expenses of Birchall, Smith & Weiner, Inc., the firm eventually organized to publish the “outside” publication which Smith and Birchall had been given permission by LWF to publish 828*828 while they continued to work for LWF in space provided for them. Despite this increased overhead, the steadily increasing advertising revenue of the Leisure World News brought in a net for it in 1971 of $44,630 based on a gross of $318,616.

During this interval of time, i.e., from 1967 through 1971, the Leisure World News was delivered unsolicited to all residences within Leisure World by LWF with the full knowledge of and without any objection from Golden Rain. In addition, such deliveries were carried out with a tacit understanding with Golden Rain that no competing unsolicited, give-away newspaper could be distributed within Leisure World except by mail.^[5]

As a consequence of the exclusive access accorded the Leisure World News by LWF, a meeting was arranged between publishers of three of the area’s competing newspapers, including plaintiff, on the one side, and Edward Olsen of LWF on the other. The basic complaint voiced to Mr. Olsen was that Leisure World’s management was subsidizing the News Advertiser, published by employees of LWF, while at the same time refusing to allow its competitors inside Leisure World except by mail. Olsen responded to such complaint by asserting that this policy of LWF had been adopted and was being followed to allow LWF to recoup the losses it had suffered during the earlier years in publishing the Leisure World News.^[6]

829*829 Beginning in 1972 there was a series of letters and other communications between Birchall, Smith & Weiner, Inc., on the one hand, and LWF on the other, the latter being represented by Edward Olsen, the president, and Otto Musch, an accountant. No good purpose would be served here to summarize all of the steps and the numerous communications utilized to develop a “record” in the corporate minutes of the two entities. It is enough to state that the end result was that Birchall, Smith & Weiner, Inc., purchased from LWF the Leisure World News for $48,000. This price was agreed to be paid at $1,000 per month for only so long as the buyer elected to continue with publication of the newspaper, or until the 48 monthly payments had been made.

Referring again to the net of $44,630 earned by the Leisure World News in calendar 1971, which accrued even though the Leisure World News was absorbing certain of the expenses of the newspaper published by Birchall, Smith & Weiner, Inc., the record reflects, out of the mouth of the president of LWF, that LWF realized and was well aware that if the Leisure World News could not be distributed inside Leisure World on an unsolicited basis it would cease to be profitable. More particularly, Edward Olsen testified concerning the agreement to sell the Leisure World News to Birchall, Smith & Weiner, Inc., “that if the Leisure World News could not be distributed inside Leisure World on a permissive basis, that Leisure World News would have no value….”

Otherwise, by the end of 1972 during which the gross of Birchall, Smith & Weiner, Inc., had grown to $559,112, Olsen and Musch had organized another corporation and had entered into contracts with the various mutuals and with Golden Rain to take over all the management functions performed up to that time by LWF for the residents of Leisure World. This new corporation as earlier noted is known as the Professional Community Management Corporation.

During this same time the pressure continued to mount from other publishers, including the plaintiff, to gain access to Leisure World for unsolicited carrier delivery. It is a reasonable inference to be drawn from the extrinsic facts that in response to that pressure, under date of March 30, 1973, a written agreement was entered into between Golden Rain and Birchall, Smith & Weiner, Inc. (by then owned 51 percent by the same persons who owned an interest in the management company servicing Leisure World),^[7] which provided that Golden West would deliver 830*830 the Leisure World News to all of the residents of Leisure World. This arrangement covered over 10,000 copies per week at an annual rate of $3,600. As a consequence, the unsolicited carrier delivery of the Leisure World News to all residences of Leisure World continued just as before. However, a representation was then made to the competition, including plaintiff, that the Leisure World News was being delivered in compliance with the rules and regulations of Golden Rain which required that newspapers could only be delivered by carrier within Leisure World to subscribers.Nevertheless, the record fails to disclose that any resident of Leisure World ever sought execution of the agreement or even knew of its existence.

More particularly, as stated in plaintiff’s opening brief, “[t]he Defendants never asked permission of the residents to allow BIRCHALL, SMITH & WEINER, INC. to distribute and the record is completely void of any evidence which showed that [even] one resident of LEISURE WORLD OF LAGUNA HILLS ever requested that the LEISURE WORLD NEWS be delivered to them over the period of 1965 through the time of trial.”

Otherwise, on the record, it is doubtful whether the board of directors of Golden Rain had authority to enter into the agreement providing for unsolicited delivery of the Leisure World News to all the residents of Leisure World.

We have already related that the board of directors of Golden Rain on March 30, 1973, entered into a written agreement with the predecessor of Golden West by means of which Golden Rain undertook on behalf of all the residents of Leisure World to “subscribe” to the Leisure World News for each of those residents.^[8]

In our original opinion, we characterized this agreement as a “cosmetic subterfuge,” and we remain persuaded that this is an accurate characterization of the agreement. To be more explicit in disclosing our reasons for this view of the matter, we note that the record includes copies of both the articles of incorporation and bylaws of Golden Rain. 831*831 These items are significant not only in what they show but in what they do not show. Nowhere in either instrument is there delegated to the board of directors of Golden Rain any authority to decide what persons or publications shall be afforded uninvited entry into Leisure World for purpose of delivery to the individual residences of Leisure World. Actually the subject is not dealt with at all.

In addition, the bylaws of Golden Rain, exhibit “J,” provide, in article II, for two classes of membership in the corporation as well as for qualification and admission to membership. Membership is not automatic. A resident must apply for membership in a mutual and at the same time for membership in Golden Rain. The pertinent provision states, “When a subscriber has been admitted to membership in a Mutual and has paid an initiation fee as fixed and determined by the board of directors, he shall be admitted to resident membership in the corporation, which membership shall be appurtenant to his membership in the Mutual.”

In going through exhibit “I,” the articles of incorporation, we noted that attached to the original draft were certain amendments. Of interest here is the fact that each amendment carried a recitation of the number of members entitled to cast votes for the amendment. The latest amendment constituting a part of this exhibit was dated February 8, 1971, at which time 7,379 members were entitled to vote and did consent to the amendment. According to the record otherwise there were at the time of the events here material to this litigation some 20,000 residents of Leisure World scattered through 12,000 residences. From this it appears that a substantial number of residents of Leisure World were not members of Golden Rain during the period here involved.

The consequence of all this, of course, is that Golden Rain purported to “subscribe” to the Leisure World News on behalf of a large number of residents who not only had not delegated any such authority to Golden Rain in its articles and bylaws, but who in fact were not even members of Golden Rain. In short, what Golden Rain undertook to do by means of the March 30, 1973, agreement was presumptuous, if not brazen, and therefore can fairly be described as a “cosmetic subterfuge.”

In any event, in May of 1973, the plaintiff’s general manager sent a letter to the presidents of each of the mutuals in Leisure World as follows: “Last November the News-Post submitted a request to the 832*832 management of Leisure World to be allowed permission to distribute the News-Post by carrier in Leisure World. We were promised that each mutual board would be consulted at their December meetings and we would have an answer within a month. [¶] After a luncheon with Robert Price and several telephone inquiries, we were told late in March that our request was denied. Further inquiries have indicated that directors of the various mutual have never been made aware of our request. [¶] We feel the management of Leisure World would prefer not to have an independent local newspaper distributed in Leisure World. Therefore they have made it as difficult as possible for us to distribute our newspaper, and we must go to the considerable expense of mailing to our readers. [¶] The News-Post has published news stories that the management would prefer not to come to the attention of the residents. However, we do not feel the residents of Leisure World want someone else to determine what they might read. It is unfair and discriminatory to deny to one newspaper a privilege that is granted to another, even if the other newspaper can be controlled. [¶] We request that your mutual board take our request under consideration. I would be glad to appear before your board to answer any questions your directors might have. We believe their judgments are more representative of your residents and less influenced by the pressures of management. [¶] I will be anxious for your reply by mail or phone. All we want is a fair shake.”

In reply thereto the then president of Golden Rain wrote some four months later, “[u]nder date of May 11, 1973, you sent a letter to the Presidents of all Mutual Corporations within the community of Leisure World, Laguna Hills. Since the subject matter of your letter relates to the community as a whole, all recipients of your letter are replying [by] this letter. [¶] Please be advised that existing regulations have been, since inception of Leisure World and remain so at the present time, that delivery of newspapers within the community can be made by your company, providing you abide by the community’s rules, which presently include the privilege extended to your newspaper to have carriers deliver copies to each and all of your subscribers. [¶] You are therefore permitted to deliver newspapers within Leisure World so long as you abide by the above regulation.”

The letter was also signed by the presidents of 11 of the mutuals. The position of Golden West and Golden Rain, maintained from the time of the agreement between Golden Rain and Birchall, Smith & Weiner, Inc., was that carrier delivery of the Leisure World News to every residence 833*833 in Leisure World was permitted by Golden Rain because each such residence was regarded as a paid “subscriber” thereto by reason of the March 30, 1973, agreement noted earlier.^[9] In this connection, we point out again that Golden Rain had neither legal nor ostensible authority to act for any resident who was not a member, and it is clear from the record that not every resident of Leisure World was a member of Golden Rain.

Otherwise, we are constrained to observe that there was a period of at least six years, i.e., from 1967 to 1973, during which there was no “subscription” agreement and during which the Leisure World News enjoyed a live carrier, exclusive access for give-away type newspapers within Leisure World to the exclusion of the Laguna News-Post and other similar publications. This circumstance was instituted and enforced by LWF, the publisher of the Leisure World News, while LWF had a management contract with Golden Rain which apparently well knew what was going on and suffered it to continue. On this point, we note once more that defendants argue that the arrangement with LWF was only an innocuous policy of Golden Rain to provide for a “house organ.” In light of such argument, we find it significant that it was Edward Olsen himself, president of LWF, and not someone from Golden Rain with whom a representative of plaintiff met in an effort to break the exclusion. Moreover, it was Olsen who stated that the exclusive access allowed the Leisure World News was a policy explicitly adopted by LWF to recoup its earlier losses sustained in publishing the Leisure World News. In this connection, while Golden Rain may have owned the streets and sidewalks within Leisure World, it was LWF which employed the security personnel which enforced the exclusion it had instituted with no exception thereto taken by Golden Rain.

Nevertheless, soon after the letter last quoted above was received, this litigation was begun.

Referring to Golden Rain’s current petition for rehearing, we note that a vigorous argument is again made that the Leisure World News is a “house organ” quite different in its content and purpose from those give-away type newspapers, including plaintiff’s, which have been excluded. While this may be true in a sense, it conveniently overlooks the compelling feature of the Leisure World News and of those excluded 834*834 which is the same, namely their advertising content. More exactly, we are not here concerned with why the Leisure World News was admittedto Leisure World, i.e., even if as a “house organ,” but why plaintiff’s newspaper wasexcluded.

Whether the Leisure World News is or is not a “house organ” has no significance as a fact for consideration in reaching our decision. On the contrary, it was thesimilarities of the Leisure World News and plaintiff’s newspaper which were what spawned this litigation and necessarily provide the basis for its resolution. In other words, what is significant is that the Leisure World News carries advertising and that it is the only give-away type newspaper carrying advertising which reaches the huge audience comprised of the residents of Leisure World. It is a competitor for the advertising dollar which retailers spend in this area of Orange County, and the fact that it has a captive audience of 20,000 affluent people whom advertisers are trying to reach is an overriding factor which no amount of sophistry emphasizing that the Leisure World News is a “house organ” can evade. The consequences of this fact are both dramatic and decisive in guiding our approach to a decision in this case. To resort to the overworked cliche, “the bottom line,” here it is $1,873,204, which represents the gross revenues of the publishers of the Leisure World News who started with an initial investment of $1,000 and in just 10 years built their business to one with the almost $2 million gross noted. No doubt good management played an important part in this success story, but exclusive access of the advertising in the Leisure World News to the residents of Leisure World must be regarded as having played a decisive part in this success, even by the most begrudging advocate. In a word, the plaintiff’s newspaper and the Leisure World News are identical insofar as they play their roles in competing for the local advertising dollar. Moreover, it was plaintiff’s exclusion from the opportunity to compete for these advertising revenues which raised this dispute, and, parenthetically, it was this theory which plaintiff was precluded from presenting to the jury in its constitutional proportions.

To summarize, then, it emerges clearly from the foregoing synopsis that in the first instance, i.e., from 1964 up to May 1, 1972, after which the management company, LWF, sold the Leisure World News to defendant Golden West (then Birchall, Smith & Weiner, Inc.), that LWF, with the tacit concurrence of Golden Rain, distributed the Leisure World News to all residences within Leisure World by live carrier on an unsolicited basis. Beginning in 1967, the same year in which Birchall 835*835 et al., started up their “shopper,” LWF, with the tacit concurrence of Golden Rain, excluded from Leisure World all other give-away type newspapers, including plaintiff’s, except those to which the residents of Leisure World had subscribed.

From May 1, 1972, to March 30, 1973, during a time when the president of the management company was also a shareholder in defendant Golden West, the same arrangement continued, and the Leisure World News was accorded exclusive live carrier circulation privileges within Leisure World to the exclusion of plaintiff’s newspaper. On the latter date, an agreement was entered into which purported, at least in the view of George Bouchard, a member of the Board of Directors of Golden Rain, to make all the residents of Leisure World “subscribers” to the Leisure World News and thus to place it arguably within the same category as other newspapers delivered within Leisure World on a subscription basis. This position was taken notwithstanding that all residents of Leisure World were not then members of Golden Rain.

The facts are clear. Plaintiff was purposefully excluded from Leisure World, and this operated to foreclose plaintiff’s opportunity to communicate its advertising to the residents of Leisure World, notwithstanding that the Leisure World News, a similar publication, in that it carried advertising, was afforded that opportunity. This alignment of competitive factors must be viewed in light of the fact that Golden West within 10 years after its predecessors became operative with a $1,000 investment was able to generate gross advertising revenue of $1,873,204. (1) Whether or not the curtailment of plaintiff’s opportunity to communicate with the residents of Leisure World under these precisely defined circumstances and thereby to be denied an equal chance to compete for those revenues was an abridgement of its constitutional rights of free speech and free press is the threshold question which we must address.

IV

Before proceeding with efforts to answer this question, we hasten to note that such efforts have been undertaken with a full awareness that any constitutional issue necessarily arises in the arena of a contest between the citizen and his government. Thus, the basic issue in many cases involving a claimed deprivation of constitutional rights is whether or not so-called state action is present. So it is here, and historically, the free speech, private property cases have fallen generally into two836*836 groups. The first group is comprised of the company town cases descending from Marsh v. Alabama (1946) 326 U.S. 501 [90 L.Ed. 265, 66 S.Ct. 276], which involved an individual who was arrested for attempting to sell religious publications on the streets of a privately owned company town, Chickasaw, Alabama. In the litigation which was finally resolved in the Supreme Court of the United States, it was determined that the action of the company in excluding private individuals from exercising their free speech rights on the streets of the company town was unconstitutional.

Without going into an extensive recitation of the rationale of the decision, it is enough for our purposes here to observe that the high court looked upon the company town as tantamount to a municipality. This imputation imported the concept of state action of a kind proscribed under the Fourteenth Amendment, for the exercise of free speech cannot be limited by a true municipality. On this latter proposition, reference is made to Van Nuys Pub. Co. v. City of Thousand Oaks (1971) 5 Cal.3d 817 [97 Cal. Rptr. 777, 489 P.2d 809], which struck down a city ordinance which prohibited unsolicited delivery to private residences of precisely the same kind of newspaper as published by plaintiff.

Plaintiff relies heavily on certain language in Marsh in arguing that its exclusion from Leisure World amounted to state action, entitling it not only to injunctive relief but affording it a further claim for damages arising under 42 United States Code section 1983. However, even though resourceful in its arguments by analogy, plaintiff has not persuaded us that Leisure World is a company town for purposes of resolving the free speech, discrimination issue. There are no retail businesses or commercial service establishments in Leisure World. It is solely a concentration of private residences, together with supporting recreational facilities, from which the public is rigidly barred. However, the peculiar attributes of Leisure World which in many ways approximate a municipality bring it conceptually close to characterization as a company town, and such attributes do weigh in our decision as will be later discussed.

The other line of free speech, private property cases is that involving regional shopping centers, which, for our purposes, starts with Diamond v. Bland [I] (1970) 3 Cal.3d 653 [91 Cal. Rptr. 501, 477 P.2d 733], followed by Lloyd Corp. v. Tanner(1972) 407 U.S. 551 [33 L.Ed.2d 131, 92 S.Ct. 2219], which led to Diamond v. Bland[II] (1974) 11 Cal.3d 837*837 331 [113 Cal. Rptr. 468, 521 P.2d 460]. In the Diamondcases, which were an outgrowth of an exclusion from a San Bernardino regional shopping center of solicitors of signatures for an antipollution initiative, the court ultimately held, because the plaintiffs had effective, alternative channels of communication with the public, and because the solicitation activities bore no relationship to the shopping center activities, that it was permissible to exclude the plaintiffs. The court said, “[u]nder these circumstances, we must conclude that defendants’ private property interests outweigh plaintiffs’ own interests in exercising First Amendment rights in the manner sought herein.” (Diamond v. Bland [II], supra,11 Cal.3d 331, 335.)

However, that is not the last word on the subject. More recently, the California Supreme Court, acting expressly under the California Constitution, reversed its position on the regional shopping center, doing so in Robins v. Pruneyard Shopping Center (1979) 23 Cal.3d 899 [153 Cal. Rptr. 854, 592 P.2d 341]. In Pruneyard, on facts strikingly similar to those in Diamond, the court ruled that the exercise of free speech rights unrelated to the customary commercial activities conducted within a privately owned, regional shopping center cannot be prohibited by the shopping center, provided the free speech activity does not interfere with or impinge in any way upon such customary commercial activity.

The Pruneyard case was appealed to the United States Supreme Court, which, recently, handed down its opinion. (Pruneyard Shopping Center v. Robins (1980) 447 U.S. 74 [64 L.Ed.2d 741, 100 S.Ct. 2035].) The United States Supreme Court decided that our state Constitution could provide more expansive rights of free speech than that provided by the federal Constitution, and that the state Constitution in affording these expanded free speech rights, as announced in Pruneyard, doesnot import a violation of the shopping center owner’s or tenants’ property rights under the Fifth or Fourteenth Amendments to the United States Constitution.

Because the public is not invited but excluded from Leisure World, and because we read Diamond [I] and Pruneyard to reach the results they do primarily because of this feature of unlimited public access, notwithstanding the stated basis for the decision of the United States Supreme Court in Lloyd Corp. v. Tanner, supra, 407 U.S. 551,we have concluded, while such cases are of no direct assistance, that they do define certain concepts for us to build on in reaching our decision here.

838*838 Pruneyard is an intriguing decision. Our Supreme Court decided that plaintiffs’ free speech rights as guaranteed by the state Constitution had been abridged when they were excluded from a regional shopping center, and it did so without ever once discussing or even impliedly dealing with the phenomenon of state action except in its discussion of Lloyd.

Proceeding from this perception of Pruneyard’s content, it could be argued that the decision, by implication, stands for the proposition, in California, that a private individual can be held to have violated the state constitutional rights of another, at least the latter’s free speech rights. However, we do not choose to interpretPruneyard that broadly, leaving it to the Supreme Court itself to do so if Pruneyardactually was intended to extend the notions of state constitutional law into such an unexplored salient.

It is enough to conclude here that Pruneyard, by reason of its emphasis on the unrestricted access to the shopping center accorded the public, held that the limitations upon plaintiff’s free speech rights were impermissibly proscribed under a rationale closely approximating that developed in Marsh. In other words, because the public had been invited on to private property, they would be deemed as remaining clothed with their free speech rights secured under the state Constitution for so long as the exercise of those rights did not impinge on the property rights of the merchants doing business in the shopping center, all with the result that any attempted curtailment of those rights imported the implicit sanction of state action.

Otherwise, to emphasize the dignity of the right of free speech under the California Constitution, Pruneyard drew upon language from Agricultural Labor Relations Bd. v.Superior Court (ALRB) (1976) 16 Cal.3d 392 [128 Cal. Rptr. 183, 546 P.2d 687], that “all private property is held subject to the power of the government to regulate its use for the public welfare.” (Id. at p. 403.)

This ALRB case was further invoked to announce, “`We do not minimize the importance of the constitutional guarantees attaching to private ownership of property; but as long as 50 years ago it was already “`thoroughly established in this country that the rights preserved to the individual by these constitutional provisions are held in subordination of the rights of society. Although one owns property, he may not do with it as he pleases any more than he may act in accordance with his personal desires. As the interest of society justifies restraints upon 839*839 individual conduct, so, also, does it justify restraints upon the use to which property may be devoted. It was not intended by these constitutional provisions to so far protect the individual in the use of his property as to enable him to use it to the detriment of society. By thus protecting individual rights, society did not part with the power to protect itself or to promote its general well-being. Where the interest of the individual conflicts with the interest of society, such individual interest is subordinated to the general welfare.'”‘ (Agricultural Labor Relations Bd. v. Superior Court, supra, 16 Cal.3d at p. 403, …)” (Robins v. Pruneyard Shopping Center, supra, 23 Cal.3d 899, 906.)

Pruneyard, in further reliance on the ALRB case, observes “that the power to regulate property is not static; rather it is capable of expansion to meet new conditions of modern life. Property rights must be `”redefined in response to a swelling demand that ownership be responsible and responsive to the needs of the social whole. Property rights cannot be used as a shibboleth to cloak conduct which adversely affects the health, the safety, the morals, or the welfare of others.”‘ (16 Cal.3d at p. 404, quoting Powell, The Relationship Between Property Rights and Civil Rights, supra, 15 Hastings L.J. at pp. 149-150.)” (Id. at pp. 906-907.)

To this we add that the gated and walled community is a new phenomenon on the social scene, and, in the spirit of the foregoing pronouncement, the ingenuity of the law will not be deterred in redressing grievances which arise, as here, from a needless and exaggerated insistence upon private property rights incident to such communities where such insistence is irrelevant in preventing any meaningful encroachment upon private property rights and results in a pointless discrimination which causes serious financial detriment to another.

This observation suggests that the facts of the case before us include two additional ingredients not found in the Pruneyard mix. While the public is not invited into Leisure World, Leisure World in many respects does display many of the attributes of a municipality. That is to say, although the public generally is not invited, there is substantial traffic into Leisure World of a variety of vendors and service persons whom the residents of Leisure World do invite in daily to accommodate the living needs of a community this large. By this we mean to refer to 840*840 plumbers, electricians, refrigeration repairmen, painters, United Parcel deliverymen, to name a few, plus the carriers of newspapers to which the residents have subscribed.

The other ingredient noted is the exclusion of plaintiff while the Leisure World News has been accorded unrestricted entry by Golden Rain even though no individual resident has invited in the Leisure World News. Suppose Golden Rain had undertaken to impose on the residents of Leisure World a rule that only one particular plumber would be allowed to enter Leisure World to perform this kind of service. If such an effort were made by Golden Rain, the discrimination would be apparent to anyone, not to mention its limitation on the residents’ freedom of choice.

Thus, the question arises as to whether the factor of discrimination is significant. To answer this question, there is a line of constitutional cases involving discriminationwhich does open the door to decision here. Just as we have interpreted Pruneyard,these cases do find “state action” present in an analogous way as an element affecting decision where there is actual or even threatened enforcement by state law in aid of discriminatory conduct. That concept is central, for instance, to the decisions in the so-called lunch-counter cases. Equally important to our analysis here there is a suggestion in Lloyd itself that such concept would even apply in federal First Amendment cases. And why not? Surely the First Amendment shares equal dignity with the Fourteenth.

Turning then in this context to Lloyd Corp. v. Tanner, supra, 407 U.S. 551, that case was a so-called shopping center case in which the respondents undertook to distribute handbills in the interior mall area of petitioner’s large, privately owned, regional shopping center. Just as in Pruneyard, private security guards invited the respondents to repair to the adjoining public streets to distribute their literature. Respondents did so and then sought an injunction against their exclusion, claiming a violation of their First Amendment rights. The Supreme Court of the United States reversed the judgment which granted respondents the injunction they sought and, in so doing, held that there had been no dedication of petitioner’s privately owned and operated shopping center to public use so as to entitle respondents to exercise any First Amendment rights therein unrelated to the shopping center’s operations. The case further held that petitioner’s property did not lose its private character and its right to protection under the Fourteenth Amendment 841*841 merely because the public had generally been invited to come into the premises for the purpose of doing business with petitioner’s tenants.

As already noted, this led to the California Supreme Court’s decision in Diamond [II], which in turn was reversed on state constitutional grounds by Pruneyard.

However, of significance to the issue here is certain language in Lloyd which suggested that a different result might have been reached had there been a different scenario. In the latter portion of the decision, the United States Supreme Court said, “The basic issue in this case is whether respondents, in the exercise of asserted First Amendment rights, may distribute handbills on Lloyd’s private property contrary to its wishes and contrary to a policy enforced against all handbilling. In addressing this issue, it must be remembered that the First and Fourteenth Amendments safeguard the rights of free speech and assembly by limitations on state action, not on action by the owner[s] of private property used nondiscriminatorily for private purposes only.” (Lloyd Corp. v. Tanner, supra, 407 U.S. 551, 567 [33 L.Ed.2d 131, 142]; original italics deleted, our italics added.)

The key word is “nondiscriminatorily.” As an indication that this notion was not suggested by an inadvertent choice of words, the opinion soon thereafter states, “`The United States Constitution does not forbid a State to control the use of its own property for its own lawful nondiscriminatory purpose.'” (Id. at p. 568 [33 L.Ed.2d at p. 142]; italics added; quoting from Adderley v. Florida (1966) 385 U.S. 39, 48 [17 L.Ed.2d 149, 156, 87 S.Ct. 242].) From this language we deduce, if the court had been faced with a discriminatory limitation of free speech on private property, that it may well have reached a different result.

Returning to California cases, our analysis brings us to Mulkey v. Reitman (1966) 64 Cal.2d 529 [50 Cal. Rptr. 881, 413 P.2d 825]. That celebrated case struck down as unconstitutional Proposition 14 which appeared on the statewide ballot in 1964. That measure, adopted by popular vote, sought to restrict the power of the state to legislate against the right of any person, desiring to sell, lease or rent his real property, “to decline to sell, lease or rent such property to such person or persons as he, in his absolute discretion, chooses.” (Former Cal. Const., art. I, § 26.)

842*842 This proposition was a direct reaction to the Hawkins Act and the subsequent Rumford Fair Housing Act which were aimed at eliminating racial discrimination in housing. The legal effect of Proposition 14 was to nullify these legislative efforts as they applied to discrimination in the housing market of California. The California Supreme Court in Mulkey exhaustively marshaled the authorities to demonstrate the presence of state action in the operation of Proposition 14 so as to bring it within the equal protection clause of the Fourteenth Amendment. Relying in the first instance onShelley v. Kraemer (1948) 334 U.S. 1 [92 L.Ed. 1161, 68 S.Ct. 836, 3 A.L.R.2d 441], the court in Mulkey said, “Shelley, and the cases which follow it, stand for the proposition that when one who seeks to discriminate solicits and obtains the aid of the court in the accomplishment of that discrimination, significant state action, within the proscription of the equal protection clause, is involved.” (Mulkey v. Reitman, supra, 64 Cal.2d 529, 538.)

Mulkey went on to observe, “It must be recognized that the application of Shelley is not limited to state involvement only through court proceedings. In the broader sense the prohibition extends to any racially discriminatory act accomplished through the significant aid of any state agency, even where the actor is a private citizen motivated by purely personal interests. [Citing Burton v. Wilmington Pkg. Auth.(1961) 365 U.S. 715, 722 (6 L.Ed.2d 45, 50-51, 81 S.Ct. 856).]” (Id. at p. 538.)

Other cases relied upon in Mulkey demonstrate the nature and extent of just what it meant by significant state involvement so as to bring essentially private conduct dependent on state implementation within the ambit of proscriptions on unconstitutional state action included: Evans v. Newton (1966) 382 U.S. 296 [15 L.Ed.2d 373, 86 S.Ct. 486]; Terry v. Adams (1953) 345 U.S. 461 [97 L.Ed. 1152, 73 S.Ct. 809]; Robinson v. Florida (1964) 378 U.S. 153 [12 L.Ed.2d 771, 84 S.Ct. 1693]; and Anderson v. Martin (1964) 375 U.S. 399 [11 L.Ed.2d 430, 84 S.Ct. 454].

The end result in Mulkey was to declare unconstitutional Proposition 14 because it operated to deny the plaintiffs equal protection of the laws in a case where the trial court had awarded a summary judgment against them in an action seeking relief under sections 51 and 52 of the Civil Code as those sections then read.

When Mulkey and the alternative scenario in Lloyd are viewed along with the “state action” implications of Pruneyard, the outline of a workable 843*843 rule emerges for application to the facts of the case before us. Its rationale derives from the differential view of “state action” as characterized in the discrimination cases when compared to that in other constitutional cases. In this case, while Leisure World is not a “company town” so as to require that it yield to the results reached in Marsh, it is a hybrid in this sense.^[10] The question then becomes, notwithstanding that the public is generally excluded except upon invitation of the residents, whether its town-like characteristics compel Golden Rain’s yielding to certain constitutional guarantees as a consequence of its adding discrimination to the picture. When that element is added, the balance tips to the side of the scale which imports the presence of state action per Mulkeyand the lunch counter cases. In other words, Golden Rain, in the proper exercise of its private property rights, may certainly choose to exclude all give-away, unsolicited newspapers from Leisure World, but once it chooses to admit one, where that decision is not made in concert with the residents, then the discriminatory exclusion of another such newspaper represents an abridgement of the free speech, free press rights of the excluded newspaper secured under our state Constitution.

In the current petition for rehearing Golden Rain devotes considerable ink in support of its contention that there could have been no discrimination practiced against plaintiff’s newspaper because “Discrimination presupposes meaningful similarity.” We are indebted to counsel for Golden Rain for supplying us the concise terms we have labored to locate. “Meaningful similarity,” that’s it! On the undisputed facts before us there could be no more meaningful similarity possible than emerges in the comparison of the Leisure World News and plaintiff’s newspaper. That meaningful similarity lies in their common role as competitors for the advertising dollars to be spent in this marketing area, an area where the Leisure World News has exclusive access to the residents of Leisure World and from where plaintiff was barred from making the unsolicited deliveries available to the Leisure World News. Thus, the legal conclusion that there was unconstitutional discrimination practiced against plaintiff’s newspaper is inescapable.

Based upon the foregoing, keeping in view the greater status of the rights of free speech and free press existing under the California Constitution 844*844 as delineated inPruneyard, and keeping in mind also that discriminatory proscription of free speech on private property may even be questionable under the federal Constitution, as suggested by Lloyd, we hold that Golden Rain, acting with the implicit sanction of the state’s police power behind it, impermissibly discriminated against the free speech and free press rights of plaintiff, guaranteed to it under the state Constitution, by excluding it from Leisure World after it, Golden Rain, without authority from the residents of Leisure World, had chosen to permit the unsolicited delivery of the Leisure World News to the residents of Leisure World. As a consequence, for so long as Golden Rain permits the unsolicited^[11] delivery of the Leisure World News to the residents of Leisure World, then it cannot permissibly discriminate against plaintiff’s opportunity to communicate with the residents of Leisure World by excluding unsolicited delivery of its newspaper to these same residents.

V

Defendant Golden Rain has argued that to subject the residents of Leisure World to unsolicited delivery of plaintiff’s newspaper would frustrate their investment expectations of privacy and freedom from the intrusions of those who have not been invited, citing Kaiser Aetna v. United States (1979) 444 U.S. 164 [62 L.Ed.2d 332, 100 S.Ct. 383]. Without more we would agree with such contention; however, it was the management of Leisure World itself which let down the bars, and Golden Rain which suffered the discrimination to continue. It was thus the choice of Golden Rain which resulted in the threat of any claimed encroachment on the privacy of the residents of Leisure World. In this vein, it is pertinent to observe, if the residents of Leisure World do not want unsolicited, give-away newspapers delivered to their homes by live carrier, then Golden Rain should cease its discrimination and exclude them all, including the Leisure World News.

Actually, as a practical matter, in response to the turgid rhetoric about the imposition on privacy and property rights which admission of plaintiff’s newspaper to Leisure World would supposedly represent, it is fair to say that there would be no imposition of substance. Parenthetically, 845*845 what we see happening is plaintiff’s delivery personnel being screened in the same way that the carriers of the Los Angeles Times are screened; we see plaintiff’s delivery personnel being instructed that they are permitted to move about the streets of Leisure World during certain daylight hours on certain days; we see plaintiff’s delivery personnel placing copies of the Laguna News-Post on the front steps or porch of each residence of Leisure World in much the same manner as would a United States Postal Service employee deliver the newspaper if it were mailed in. This hardly represents an assault upon the privacy of any resident of Leisure World beyond what is already occurring, especially when no resident of Leisure World has actually requested delivery of the Leisure World News either.

Nevertheless, if this activity represents an unacceptable intrusion upon the privacy of the residents of Leisure World, a privacy which it is argued they paid for when they bought homes there, then Golden Rain should cease its discrimination and excludeall newspapers to which individual residents have not personally subscribed.

The rule we announce as the basis for resolution of this phase of the case will not result in requiring unrestricted admittance to Leisure World of religious evangelists, political campaigners, assorted sales-people, signature solicitors, or any other uninvited persons of the like. It will compel admission only of those who wish to deliver a newspaper like the Leisure World News, “like” in the sense that it is a competitor of Leisure World News for the same advertising dollars to be spent by businesses in Southern Orange County. In short, for purposes of avoiding discrimination against the state constitutional guarantees of free speech and free press, the right of any and all to enter this private, gated community to exercise this state constitutional right must be exactly measured by the right accorded to one, both as to the nature of the activity of that one as well as to the conditions of his admission. Under such a rule, the owners of this private property still remain incomplete control of who shall enter Leisure World, while Golden Rain is yet required only to act fairly and without discrimination toward others in the exercise of their state constitutional rights of free speech and free press which rights Golden Rain itself has chosen to accord exclusively to the Leisure World News while acting wholly beyond the knowledge and complicity of any resident of Leisure World.

846*846 VI

In one of the earlier petitions a worried concern was voiced that the rule here announced would confer a kind of “equal time” entitlement on any who wished to enter should persons of opposite or different views have been “invited” into Leisure World to speak or to entertain. To note these objections to the rule is itself enough to demonstrate how wide they are of the mark. The rule we have announced has nothing to do with instances where persons are invited into Leisure World by its residents. The premise on which the rule here announced has derived is the discrimination by Golden Rain which has allowed an exclusive opportunity to Golden West to deliver its Leisure World News to the residents of Leisure World where, as to those residents individually, such deliveries are wholly unsolicited. To this extent, Golden Rain, with absolutely no advice from or consultation with the actual residents, by its own choice and not that of the residents, has rendered Leisure World an area where a singular member of the public is admitted for this limited purpose. Thus, the rule has absolutely no application to any person who or activity which the residentsof Leisure World may choose to invite to come in.

The principal argument advanced by Golden Rain in its earlier petition for rehearing which challenged our initial decision was also that it contravened constitutionally guaranteed rights to privacy and freedom of association. No good purpose would be served here to respond specifically to each of the points contained in the 10 pages of learned constitutional discourse offered under point IV of Golden Rain’s earlier petition for rehearing except to say that we can only agree with the propositions there recited. The problem with the petition is that it ignores the realities of this case.

We have already noted the letter directed to plaintiff by the president of Golden Rain which closed with the statement that “you are therefore permitted to deliver newspapers within Leisure World so long as you abide by the above regulation” which meant that plaintiff could enter Leisure World and deliver its newspaper to any of its “subscribers.” Of course, we all know that in the nature of things there are no “subscribers” to give-away newspapers which subsist entirely by advertising. However, the point remains that Golden Rain specifically indicated that it had no objection to associating with plaintiff’s carriers provided those carriers were inside the gates of Leisure World solely to deliver plaintiff’s newspaper to its “subscribers.” Just how these very same carriers 847*847 would ipso facto become a threat to the freedom of association and right of privacy within Leisure World just because they would be delivering plaintiff’s newspaper on an unsolicited instead of a subscription basis escapes us.

Similarly, much is made of the fact that residents of Leisure World actually performed the distribution of the Leisure World News, the implication being that some infectious, undisciplined rabble would overrun Leisure World if plaintiff were allowed to distribute its newspaper there.^[12]

If this is truly a concern, we see no legal problem in Golden Rain’s imposing a regulation which would require employment of only Leisure World residents for delivery of any unsolicited publication. This would fall well within the ambit of Justice Traynor’s time, place, and manner rule in Hoffman.^[13] Otherwise, Golden Rain could prescribe that any resident who elected not to receive the unsolicited delivery would need only notify Golden Rain of such wishes and that would terminate delivery at that residence.

The significant point is that we see nothing in the record which indicates that the individual residents of Leisure World have expressed themselves on what give-away newspaper is to be allowed to enter and what ones are to be excluded. The discriminatory exclusion has been imposed solely by the owner of the common areas, i.e., the owner of the streets and sidewalks, not the owners of actual residences. Thus, we are forced to conclude that the real reason for the exclusion of the plaintiff’s newspaper had and continues to have little if anything to do with an actual concern for the preferences of the residents as to whom they shall associate with. In short, at the time this litigation began and continuing to the present, the distribution to the residents of Leisure World of the Leisure World News was and is just as much unsolicited by them as was and is that of the Laguna News-Post.^[14]

848*848 VII

Based upon the foregoing discussion of points IV, V and VI, the trial court’s denial of plaintiff’s application for an injunction to end its exclusion from Leisure World will be reversed.

Having determined that there is a legal basis for reversal as discussed above, there is no need to address plaintiff’s other contention that state action was implicit from the fact that Leisure World was developed with federally insured financing.

DAMAGES FOR THE CONSTITUTIONAL DEPRIVATION

I

(2) Because we do not wish to extend this opinion beyond its already inordinate length, it is enough to observe here that we agree with the trial court and hold that plaintiff neither pleaded nor proved a right to damages under 42 United States Code section 1983. That section provides for recovery of damages against any person “who, under color of any statute, ordinance, regulation, custom, or usage, of any State … subjects, or causes to be subjected, any citizen of the United States … to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws” of the United States. Under our decision we have ruled that there has been no deprivation of any right, privilege or immunity secured by the Constitution and laws of the United States.

In other words, it is an answer to plaintiff’s claim of right to an opportunity to prove alleged damages under 42 United States Code section 1983 to observe that the discrimination which we hold was here practiced was solely with reference to the plaintiff’s free-speech, free-press rights secured under the California Constitution. To this, plaintiff could conceivably respond that in our decision we have noted a suggestion in Lloyd Corp. v. Tanner, supra, 407 U.S. 551, that discriminatory conduct in a First Amendment context might well have led to a different result, and that therefore we must further decide explicitly, because we have held “state action” to have been present in plaintiff’s exclusion 849*849 from Leisure World, whether a federal constitutional right was abridged in order to afford a full and complete disposition of plaintiff’s claim to damages under the federal civil rights statute. To this we say again that no federal right is here involved and that Lloyd only suggested the thread by which the knot was unraveled. Moreover, it is enough to decide, which we do, that the “state action” necessary to import the sanction of constitutional restraint dictated by the Constitution of California is not coextensive with and is something less than that degree of conduct sufficient to entitle one to a right of action for damages under 42 United States Code section 1983 where a federal right allegedly has been violated.

Just what that quantum of difference is we need not define. Because of the special dignity accorded the rights of free speech arising under the California Constitution as announced in Pruneyard, it is enough to state that the difference is readily recognizable here, and it is the more recognizable because of the palpably serious economic consequences which were caused by Golden Rain’s discriminatory exclusion of plaintiff’s newspaper from Leisure World.

II

(3) Although plaintiff has no claim to damages under the federal civil rights statute, because we have decided that it was constitutionally impermissible under the California Constitution for Golden Rain to exclude plaintiff’s newspaper from Leisure World after it had for years allowed exclusive access to Leisure World by the Leisure World News, it remains to be decided if there is any other theory upon which plaintiff could be entitled to damages.

Plaintiff contends that the court compounded the error of its December 5, 1971, ruling by means of amplifying remarks made at the time it granted the defense motion above noted in which remarks it stated that there was no right to money damages in any event because the state constitutional right, if there were one, is not “self-executing.”

It is clear from the record that the trial court at the time of the ruling of December 5, 1977, was of the view, based solely on the pleadings, and in light of the six factual items earlier noted as deemed to be without substantial controversy, that plaintiff was not entitled to money damages even if the court were to rule that there had been an abridgement of plaintiff’s constitutional free speech and free press rights; 850*850 hence, the prohibition of any references thereto in the presence of the jury.^[15]

In other words, plaintiff contends that the trial court erred in denying it the opportunity to put on evidence of the damages which it incurred as a result of the abridgement of its right of free speech, and we assume, for the sake of analysis, that the plaintiff has suffered actual, 851*851 demonstrable, compensatory damages arising solely from its exclusion from Leisure World and could have proved such damages had it been permitted to put on such evidence.

The issue, as posed by the parties’ briefs, therefore, is whether the free speech clause of the California Constitution (art. I, § 2) affords a right to money damages without the benefit of enabling legislation.^[16]

Passing for the moment that both the plaintiff and the trial court have mistakenly equated the right to money damages for a constitutionally defined grievance with the “self-executing” nature or lack of it in the California Constitution, we note that great emphasis is placed by plaintiff on the right-to-privacy cases as supporting its position.

In Porten v. University of San Francisco (1976) 64 Cal. App.3d 825 [134 Cal. Rptr. 839], dealing with the new state constitutional provision assuring the individual right to privacy (art. I, § 1), the court said, “The constitutional provision is self-executing; hence it confers a judicial right of action on all Californians. (White v. Davis, supra,13 Cal.3d at p. 775 [120 Cal. Rptr. 94, 533 P.2d 222].) Privacy is protected not merely against state action; it is considered an inalienable right which may not be violated by anyone. [Fn. omitted.] (See Annenberg v. Southern Cal. Dist. Council of Laborers (1974) 38 Cal. App.3d 637….” (Id. at pp. 829-830.)

In Porten the plaintiff sought damages against the University of San Francisco for its alleged infringement of his right to privacy when it disclosed to a state agency his grades earned at Columbia before transferring to San Francisco. In applying the rule above recited, the appellate court reversed the trial court’s judgment of dismissal after sustaining of a general demurrer. From this we conclude that plaintiff was thereafter afforded an opportunity to put on evidence of any damages he had suffered by reason of the infringement upon his constitutional rights to privacy.

The self-executing nature of the constitutional provision above noted as recited inPorten was confirmed in passing by Justice Sims in 852*852 Emerson v. J.F. Shea Co.(1978) 76 Cal. App.3d 579, 591 [143 Cal. Rptr. 170]. It is also recognized with approval by Witkin. He writes, “… it has been declared that a [state] constitutional provision will now be presumed to be self-executing, and will be given effect, without legislation, unless it clearly appears that this was not intended.” (5 Witkin, Summary of Cal.Law (8th ed. 1974) Constitutional Law, § 38, p. 3278.)

Having moved through this exposition of cases dealing with the right-to-privacy amendment to the California Constitution, we must observe that the issue remains, without more, unresolved; after all, White v. Davis, supra, 13 Cal.3d 757, 775, the leading case which passed upon and construed the consequences of the new amendment, and upon which Porten relied, was an injunction case.

Here, we part company with our decision after the first rehearing. In that opinion we proceeded to discredit Porten as authority by way of analogy for allowing money damages for violation of other state constitutional rights because, as we stated, the right to privacy had previously existed as a common law right.

In its current petition for rehearing, the plaintiff has effectively demonstrated that we were wrong in such latter pronouncement, and we must therefore retract it. In such petition plaintiff has directed our attention to Melvin v. Reid (1931) 112 Cal. App. 285 [297 P. 91], which reversed a judgment of dismissal, after a demurrer had been sustained, in an action which included a count for damages brought over 50 years ago under section 1 of article I of the California Constitution and based on allegations that a right of privacy had been illegally encroached upon. This, of course, was long before the 1973 amendment construed by White, relied upon in Porten.

In the course of its decision, the Melvin court categorically rejected the suggestion, insofar as California is concerned that a right of privacy existed as common law. The court went on to say, “We find, however, that the fundamental law of our state contains provisions which, we believe, permit us to recognize the right to pursue and obtain safety and happiness without improper infringements thereon by others. [¶] Section 1 of article I of the Constitution of California provides as follows: `All men are by nature free and independent, and have certain inalienable rights, among which are those of enjoying and defending life and liberty; acquiring, possessing and protecting property; and pursuing and 853*853 obtaining safety and happiness.’ [¶] The right to pursue and obtain happiness is guaranteed to all by the fundamental law of our state. This right by its very nature includes the right to live free from the unwarranted attack of others upon one’s liberty, property, and reputation. Any person living a life of rectitude has that right to happiness which includes a freedom from unnecessary attacks on his character, social standing or reputation…. We believe that the publication by respondents of the unsavory incidents in the past life of appellant after she had reformed, coupled with her true name, was not justified by any standard of morals or ethics known to us and was a direct invasion of her inalienable right guaranteed to her by our Constitution, to pursue and obtain happiness. Whether we call this a right of privacy or give it any other name is immaterial because it is a right guaranteed by our Constitution that must not be ruthlessly and needlessly invaded by others.” (Id. at pp. 291-292.)

From the foregoing, it is too plain for argument that our state Constitution has been interpreted to support an action for damages for a violation of rights arising under old section 1, article I, and that such an action was possible without the need for enabling legislation. In reliance thereon and because of the special dignity accorded the rights of free speech and free press under the California Constitution, whether they be described as “inalienable” rights or not, it is not illogical in view of Melvin to hold, which we do, that a direct right to sue for damages also accrued here by reason of plaintiff’s exclusion from Leisure World, and that it accrued under article I, section 2 of the California Constitution.

Counsel for plaintiff has persuasively pointed out further, accepting that plaintiff has suffered a violation of its state constitutional rights, that Civil Code sections 1708 and 3333 together also provide a predicate for recovery of money damages in instances of such violations.

Section 1708 provides that “[e]very person is bound, without contract, to abstain from injuring the person or property of another, or infringing upon any of his rights.”

Section 3333 provides that “[F]or the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this Code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.”

854*854 The question then is whether the constitutionally protected right of plaintiff which we have held to have been violated comes within the ambit of section 1708. We can find no good reason why it does not, and so as pointed out by plaintiff, it follows “as night follows day,” that a violation of that right imports by reason of section 3333 a correlative right to recover any damages proximately resulting from the violation of such right, keeping in perspective that we regard the constitutional violation here as having arisen from plaintiff’s discriminatory exclusion from Leisure World with the implicit sanction of state action behind such exclusion.

Based upon the foregoing, it was error for the trial court to foreclose the plaintiff’s right to present evidence of damages it sustained as allegedly arising from the unconstitutional exclusion of its newspaper from Leisure World.

III

(4) Having concluded that it was constitutionally impermissible for Golden Rain to discriminate against plaintiff’s newspaper by excluding it from Leisure World, we next decide whether the trial court, upon a new trial, should entertain plaintiff’s efforts to prove damages on the further theory that Golden Rain and Golden West allegedly acted in concert unconstitutionally to limit access to Leisure World only to the Leisure World News to the exclusion of plaintiff’s newspaper and thereby brought about an unreasonable restraint of trade.

The plaintiff in its opening brief argues that the error of December 5, 1977, was also compounded because plaintiff was not allowed to introduce evidence in support of or to argue to the jury a theory of relief based upon a “conspiracy to deprive plaintiff of [its] constitutional rights [of free speech] as overt acts” such as to qualify as a violation of the Cartwright Act.

Referring to the trial already had, it logically followed, in view of the trial court’s orderin limine, that the jury did not consider the wrongful discriminatory exclusion from Leisure World of plaintiff’s newspaper as an element in connection with its finding or not finding a conspiracy or combination resulting in an unreasonable restraint of trade as alleged by plaintiff in the fourth amended complaint. However, because we have concluded that such discriminatory exclusion was wrongful, it necessarily 855*855follows that the court erred in applying its December 5, 1977, order so as to prevent the plaintiff from adverting in the presence of the jury to the constitutional deprivation as an element of its theory of grievance against both defendants. This limitation was necessarily reflected in a refusal to instruct the jury in keeping with what we have here held to be plaintiff’s unconstitutional exclusion from Leisure World.

In arguing the Cartwright Act phase of the case to us, defendant has repeatedly asserted that an illegal restraint of trade does not require that the overt acts of the individuals themselves be illegal. While this may be true as a general proposition, it is an irrelevant if not diversionary argument here. As we understand plaintiff’s position, it contends that the trial court erred in preventing it from arguing the unconstitutionalnature of plaintiff’s exclusion as only one element for the jury to weigh in deciding whether the restraint implicit in the exclusion was unreasonable. We agree. In other words, just because an unreasonable restraint can arise from legal overt acts does not mean that an unreasonable restraint cannot arise from illegal overt acts.

Thus, there can be no question that the discrimination against the Laguna News-Post in the form of its unconstitutional exclusion from Leisure World presented an additional circumstance which the jury should have considered under such instructions as would have enabled it to decide if there had been acts in concert by two or more persons to carry out an unreasonable restraint on trade or commerce. (Bus. & Prof. Code, § 16720.) If the jury were to find that there were such an unreasonable restraint, then the consequences thereof would be governed by Business and Professions Code section 16750 under which the jury would be entitled to decide further whether the plaintiff was injured in its business by reason of any such unreasonable restraint found to have occurred as defined by Business and Professions Code section 16720.

Because of the error of the trial court at the outset as represented by its order of December 5, 1977, all of the urgings of Golden West in its petition for rehearing about there being substantial evidence to support the jury’s verdict which held against plaintiff on its theory of an illegal combination in restraint of trade are meaningless. The ground rules under which the jury decided the case were wrong, and plaintiff, should it seek a new trial, is entitled to try to prove that Golden West participated 856*856in influencing Golden Rain’s unconstitutional exclusion of the plaintiff’s newspaper from Leisure World and to try to prove additionally that this resulted in an unreasonable restraint of trade which proximately caused damages to the plaintiff for the applicable period not barred by the statute of limitations.

Unless there were such complicity which resulted in an unreasonable restraint of trade and commerce, no violation of section 16750 of the Business and Professions Code occurred. Otherwise, even though the appeal has been dismissed as to Golden West, plaintiff is still entitled to pursue the foregoing theory against Golden Rain as a possible participant in the alleged conspiracy.

THE REMAINING ISSUES

On the factual issues actually tried to the jury on the cross-complaint under the Cartwright Act and the Unfair Trade Practices Act, there was substantial evidence abounding to sustain the jury’s verdicts on the cross-complaint, and we see no good purpose to be served in pursuing a detailed recitation of such evidence. The judgment in that respect is affirmed.

DISPOSITION

Item No. 5 deemed to be without substantial controversy is stricken, there being absolutely no evidence in the record to support such a determination. Insofar as the judgment denied plaintiff’s application for an injunction to terminate its exclusion from Leisure World, the judgment is reversed with directions. The trial court is directed to enter a new and different judgment granting such application on terms and conditions substantially as follows: For so long as Golden Rain or any other entity, exercising a power of control over the right of entry into Leisure World, authorizes or suffers the unsolicited, live carrier delivery of any giveaway type newspaper, including the Leisure World News, to any residence in Leisure World where any occupant thereof has not personally requested or subscribed to such delivery, the plaintiff shall be entitled to enter Leisure World for the purpose of delivering its newspaper, unsolicited, to any such residence in Leisure World, provided nevertheless that such delivery shall be under the same rules and regulations as to time, place, and manner as apply to the delivery of e.g., the Los Angeles Times and other newspapers offered for sale to subscribers, and provided further that if any resident of Leisure World shall expressly 857*857 state in writing to Golden Rain or to the management of Leisure World that he or she does not wish to receive unsolicited delivery of the Laguna News-Post to his or her residence, then plaintiff shall refrain thereafter from any delivery to that resident. In this latter instance, plaintiff shall be entitled to verify independently by telephone call or personal visit that any given resident does not wish to receive unsolicited delivery of the Laguna News-Post.

Because we have decided that plaintiff’s exclusion from Leisure World was unconstitutional discrimination and therefore wrongful as a matter of law, the trial court is further directed, upon due application of plaintiff, to try, with a jury if requested, those issues of damages arising from the illegality of the exclusion of the Laguna News-Post from Leisure World, namely: (1) whether plaintiff suffered any damages caused by its illegal exclusion from Leisure World as measured by sections 1708 and 3333 of the Civil Code; (2) whether there was any concerted action or agreement between Golden Rain and Golden West, per section 16720, subdivision (a) of the Business and Professions Code, which caused the unconstitutional exclusion of the Laguna News-Post from Leisure World such as to constitute an unreasonable restraint of trade; and (3) whether there were any actual damages proximately resulting from any such unreasonable restraint of trade over the four years next preceding the filing of the action for assessment per section 16750.1 of the Business and Professions Code.

Except as reversed with directions above, the judgment is affirmed, and each party shall bear its own costs on appeal.

Gardner, J.,^[*] concurred.

KAUFMAN, Acting P.J., Concurring and Dissenting.

Somewhat reluctantly,^[1] I concur in the opinion and judgment except insofar as it holds that a discriminatory violation of a newspaper’s constitutional right to freedom of the press gives rise to a direct cause of action for damages outside the parameters of recognized tort law and independent of the statutory law dealing with unlawful restraints of trade and unfair business practices. Not a single case or authority so holding is cited for that novel proposition, and the authorities that are cited in support of it are neither compelling nor persuasive.

858*858 Even if the majority were correct that the provision in the California Constitution guaranteeing freedom of the press (art. I, § 2, subd. (a)) is self-executing, that would not automatically and necessarily result in the conclusion that a violation of that right gives rise to a cause of action for damages. Self-executing means no more than that the constitutional right will be enforced without enabling legislation. The fact that a constitutional provision is self-executing does not establish the remedies that are available for its enforcement. Injunctive or declaratory relief may be available to the exclusion of money damages.

Moreover, it is clear that the free press provision of the California Constitution is not self-executing, at least in the sense that its violation gives right to a direct cause of action for damages. Subdivision (a) of section 2 of article I provides: “Every person may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of this right. A law may not restrain or abridge liberty ofspeech or press.” (Italics added.) A constitutional provision may be regarded as self-executing “if the nature and extent of the right conferred and the liability imposed are fixed by the Constitution itself, so that they can be determined by an examination and construction of its terms….” (Taylor v. Madigan (1975) 53 Cal. App.3d 943, 951 [126 Cal. Rptr. 376]; accord; Chesney v. Byram (1940) 15 Cal.2d 460, 462 [101 P.2d 1106]; Flood v. Riggs (1978) 80 Cal. App.3d 138, 154 [145 Cal. Rptr. 573].) Obviously, the language “a law may not restrain or abridge liberty of … press” falls a bit short of fixing the “extent of the right conferred” and, a fortiori, “the liability imposed.” Indeed, inasmuch as the prohibition is against abridgement of the right by “[a] law,” it is problematical whether the constitutional provision has any application to the conduct of nongovernmental entities.

The last observation is pertinent also to the fundamental distinction between the case at bench and the right of privacy cases cited by the majority. The initiative constitutional amendment to section 1 of article I of the California Constitution, adding privacy to the enumerated inalienable rights,^[2] had a unique “legislative” history that indicated the 859*859 provision was meant to protect the right of privacy against unlawful intrusions by either governmental or private entities and was intended to be enforceable without more. (See White v. Davis (1975) 13 Cal.3d 757, 773-776 [120 Cal. Rptr. 94, 533 P.2d 222]; Porten v. University of San Francisco (1976) 64 Cal. App.3d 825, 829 [134 Cal. Rptr. 839].) The courts in both the White and Portendecisions relied entirely on that unique “legislative” history in determining that the provision establishing an inalienable right to privacy was self-executing and, apparently in Porten, that its violation gives rise to a direct cause of action for damages. Thus those decisions constitute no authority for a damage action based on article I, section 2, subdivision (a). Neither does the observation in Emerson v. J.F. Shea Co. (1978) 76 Cal. App.3d 579, 591 [143 Cal. Rptr. 170], that in White the court indicated that the constitutional amendment adding privacy to the list of inalienable rights was intended to be self-executing.

Civil Code section 3333 is not a substantive statute; it merely prescribes the general measure of damages in tort cases. Civil Code section 1708 which provides that every person is bound to abstain from injuring the person or property of another or infringing any of his rights, states a general principle of law, but it hardly provides support for the adoption of the novel legal proposition that a violation of subdivision (a) of section 2 of article I of the California Constitution gives rise to a direct cause of action for damages outside the parameters of recognized tort law and independent of the statutory law governing unlawful restraints on trade and unfair business practices.

A petition for a rehearing was denied June 16, 1982, and respondent’s petition for a hearing by the Supreme Court was denied August 18, 1982.

[1] All the evidence in the record is to the contrary, and so No. 5 above will be ordered stricken. The actual fact is that the Leisure World News was and at all times has been admitted to Leisure World without any expression of assent or invitation by any resident of Leisure World whatsoever.

[2] Our information supplied by counsel was that plaintiff had sold its newspaper to Media General, a publishing company which had previously purchased the assets of Golden West. In this connection, we were further informed by counsel for plaintiff that Laguna Publishing Company had nevertheless retained ownership of its causes of action against both Golden Rain and Golden West; however, we were further advised that Laguna Publishing Company, as a condition of the sale of its newspaper to Media General, was required to negotiate a settlement with Golden West.

Thereafter, we were informed that a settlement had been reached and that the superior court had confirmed it within the contemplations of sections 877 and 877.6 of the Code of Civil Procedure. Following those proceedings, the appeal as to Golden West was dismissed October 27, 1981.

[3] Following the filing of our initial opinion, it would not require much imagination to suppose that Golden Rain would undertake directly or would authorize others to solicit personally each residence in Leisure World for the purpose of obtaining something in writing from each, specifically requesting delivery of the Leisure World News to that residence. If this were done, the import of this decision would require that the same opportunity to solicit each residence in Leisure World be accorded to plaintiff.

[4] Because the determination of the constitutional issue is and always has been an issue of law, both in the trial court and before us, we have now reached a point of aggravated impatience with counsel for Golden Rain because of their dogged advocacy on this point as illustrated by a statement in the current petition for rehearing, namely, “The legal principles coined by the Court are constructed on the Court’s own independent fact searching and drawing of inferences in derogation of established rules of appellate review. As a consequence, the Court has become an advocate for plaintiff.” Such intemperate and wholly inaccurate assertions are of no aid to us in the task of trying to decide a difficult case.

[5] In the earlier petitions of both defendants for rehearing this statement of fact in our original opinion was challenged as unsupported by the record. Golden West argued that the jury’s verdict and the court’s findings are to the contrary, explicitly pointing out that the trial court found there was no conspiracy. That argument begs the question, for such finding is based on the previous legal determination of the court that no constitutional deprivation was involved in the exclusion of plaintiff’s newspaper. In any case, the facts recited above do not necessarily describe a conspiracy.

[6] At the initial oral argument, Mr. Watson, appearing for Golden West, referred us to pages 31-35 of Golden West’s petition for rehearing as demonstrating by citations to the record a refutation that Mr. Olsen had stated that the reason for the policy which excluded all give-away newspapers except the Leisure World News was to enable LWF to recoup the losses it had suffered in earlier years. We have with exacting particularity gone through the record cited by Mr. Watson, and otherwise, and can find nothing which directly contradicts the testimony of Mr. Moses at reporter’s transcript volume XXIII, p. 5772, lines 9-14. Just because Mr. Olsen testified that he did not recall what was said 10 years earlier does not disprove the Moses testimony. Moreover, we must again point out that arguments about substantial evidence on this point are meaningless because the court had ruled in limine that no constitutional right had been abridged by excluding plaintiff’s newspaper. Accordingly, the necessary starting point in any analysis of the constitutional issue is a hypothesis which must ignore any findings of fact as meaningless to this issue.

[7] As a consequence of other litigation, the stock in Birchall, Smith & Weiner, Inc., acquired by Olsen and Musch was later restored to Smith and Birchall.

[8] There appears to be a disparity of viewpoint between the two defendants as to the import of this agreement. Golden Rain in its earlier petition for rehearing states, “Nothing in the agreement designates the residents of Leisure World as `subscribers.'” On the other hand, Golden West in its petition for rehearing quotes at length the testimony of George Bouchard of Golden Rain to the effect that it was the intent of the agreement to make the residents of Leisure World “subscribers” to the Leisure World News. Otherwise, in the body of Golden West’s petition for rehearing references are made repeatedly to the “subscription agreement.”

[9] See footnote 8 where we referred to the testimony of George Bouchard to this effect.

[10] Leisure World at the time material to this litigation had about 20,000 residents, its own system of roads and streets, its own security force, its own parks, its own recreation facilities, and a hybrid form of self-government which dealt with matters of internal maintenance, security, and operation of the 8 square miles of the project.

[11] Again, we observe that a substantial number of the residents of Leisure World are not even members of Golden Rain, and so the steps taken by which Golden Rain purported to “subscribe” to the Leisure World News for all such residents were meaningless in terms of the issue here presented.

[12] Here it is again appropriate to refer to Golden Rain’s letter to plaintiff advising that it was free to enter to deliver its newspaper to subscribers. With this the case, we fail to see the relevance of the strident pleas about rights to privacy and to freedom of association.

[13] In re Hoffman (1967) 67 Cal.2d 845, 852-853 [64 Cal. Rptr. 97, 434 P.2d 353].

[14] Here is the appropriate place to observe that we do not regard this case as one likely to generate a great constitutional upheaval despite the stentorian tones in which Golden Rain has portentously argued it. The reason this litigation was commenced and has been so vigorously defended is money, and it has nothing to do with protecting any private rights of association. It began because of a fight between two newspapers over advertising revenues, and just why Golden Rain has taken sides in the dispute, even to the point of practicing free press discrimination, eludes us. This is purely and simply a discrimination case with substantial economic consequences, and not one truly involving the resolution of the rights of free speech in conflict with the vested rights of private property.

[15] The following is a full text of the court’s remarks made at the time of the December 5, 1977, ruling:

“There remains the one question of the motion to exclude from the jury references to Plaintiff’s claim of violation of or infringement of the rights, that is, the alleged constitutional rights of free press. And the motion is to exclude reference to that in voir dire, opening statements, evidence, argument or other proceedings before the jury….

“All right. The motion is granted.

“Now, let me elaborate on that. The motion to exclude from the jury references to the Plaintiff’s claim of the violation of [its] constitutional rights is granted.

“If such a violation occurred, it does not give the right to damages in the Plaintiff. There are insufficient allegations in the Complaint to bring the Plaintiff’s claim under the provisions of the Federal Civil Rights Act, the 1983 sections, and that is, the provision under Federal law that would have to be — with which we would have to be concerned if the Plaintiff were asserting a right to damages because of the claim of the violation of the right to a free press by virtue of the fact that they were precluded from delivery within the gates of Leisure World Laguna Hills.

“The Complaint does not allege facts that would show any conduct under color of State law or statute or ordinance or custom, as is required by that act. It would appear that the initial conduct that is alleged did occur beyond the date that the statute would permit an action for recovery, that is, sometime in 1967, and the Complaint was filed in 1973. The question of whether or not the Defendants should be restrained from excluding Plaintiff from the grounds of Leisure World Laguna Hills is before the court and is properly a question for the court to decide, that is, should an injunction issue? And I anticipate that when the matter is submitted to the jury on the Cartwright assertions, that is, the assertions under the Cartwright Act, and the assertions under the Unfair Trade Practices Act, if there is other evidence that any party wants to present to the court on the issue of whether or not the injunction should issue after the jury has the case, you may present any additional evidence that has to do with the item of the injunction.

“The question under the State Constitution, that is, assuming there is an assertion of a violation of constitutional rights, should there be a right to recover damages in a State court because the allegations are that it violates the State Constitution. When there is an assertion of an inverse condemnation by the State, clearly, there is a right to recover damages because that is compensation for the taking of property. But in those instances where there is an assertion of violation of free press or free speech, there is no State statute on that subject. There is a State statute that gives the right to damages on a violation of the civil rights, and that is the Unruh Act. The legislature saw fit to enact the Unruh Act and give the right to damages for a violation of civil rights, but I don’t believe the California Constitution is self-executing in other circumstances.

“So, we will proceed to trial on the Plaintiff’s claim for damages under the Unfair Trade Practices Act, and under the allegations of violations of the Cartwright Act, and on the Cross-Complaint where the Cross-Complainant is asserting, at least, some acts that they contend are also a violation of the Unfair Trade Practices Act and the Cartwright Act.”

[16] Plaintiff’s brief argues its right to money damages in terms of whether the state Constitution is “self-executing.” This approach begs the question. We have already deemed it to be “self-executing” to the extent that injunctive relief is available without the need for enabling legislation.

[*] Retired Presiding Justice of the Court of Appeal sitting under assignment by the Chairperson of the Judicial Council.

[1] My reluctance is based on my agreement with the majority (see majority opn., ante, pp. 847-848, fn. 14) that this case really involves nothing more than a commercial dispute between two entities engaged in the newspaper business and my regret that plain-plaintiff has been successful in importing into the dispute the revered constitutional right of freedom of the press. Although I find it difficult to argue with the logic of the discussion of constitutional issues in the majority opinion, I have the uneasy feeling that by right this case should not, and in fact does not, involve the grave constitutional concerns confronted in the majority opinion.

[2] The language of article I, section 1, of the California Constitution is: “All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.”

Keywords: Constitutional Issues

Ruiz v. Harbor View Community Association

37 Cal.Rptr.3d 133 (2005)

Summary by Mary M. Howell, Esq.:

Facts

After an association’s attorney sent letters to a homeowner concerning his behavior at board meetings after the association denied the homeowner’s architectural application, the homeowner sued association for defamation. The letters concerned the homeowner’s behavior at board meetings. In response to the complaint, association filed an anti-SLAPP motion, urging that the action for libel could not succeed because the letters were “privileged” by law.

Held

For association. In an anti-SLAPP motion, the moving party must show first that the communications are in furtherance of protected speech. In response, the plaintiff must show that he is likely to succeed on the merits of the case (in other words, that his action for libel is likely to succeed if it goes to trial.) In this case, the court found that the statements were one of the types of statements the anti-SLAPP statute was designed to protect, that is, statements made in connection with an issue of public interest. Even though the letters were private (sent by the association’s attorney to the homeowner), they concerned an issue of ongoing controversy, viz, the association’s treatment of the homeowner’s architectural application. The court then ruled that the homeowner had failed in response to show that he was likely to succeed on the merits of his case. One of the letters was only sent to the homeowner himself (and therefore lacked one of the requirements for defamation, that is, that the statement be “published” to a third party.) The other statement was held to be “mere hyperbole” and therefore, not defamation.

*** End Summary ***

Ruiz v. Harbor View Community Ass’n.

37 Cal.Rptr.3d 133 (2005)

OPINION

FYBEL, J.

INTRODUCTION

Defendant Harbor View Community Association (HVCA) appeals from the trial court’s denial of HVCA’s special motion to strike the libel cause of action pursuant to Code of Civil Procedure section 425.16 (all further code references are to the Code of Civil Procedure unless otherwise indicated). Section 425.16, commonly referred to as the anti-SLAPP statute,^[1] provides for a special motion to strike “[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 or California Constitution in connection with a public issue.” (§ 425.16, subd. (b)(1).)

The complaint, filed by Christopher P. Ruiz (Ruiz) and Theresa Keane-Ruiz (collectively Plaintiffs), alleges nine causes of action stemming from the denial by HVCA’s architectural committee of Plaintiffs’ conceptual plans to rebuild their house, which lies within the development subject to the HVCA. In the libel cause of action,Ruiz alone alleges two letters written by HVCA’s attorney defamed him. The trial court denied HVCA’s anti-SLAPP motion to strike the libel cause of action on the ground the letters did not come within the definition of an “`act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue'” under section 425.16, subdivision (e).

We hold the two letters were protected speech under subdivision (e)(4) of section 425.16. Ruiz failed to meet his burden of proving the second letter was defamatory and either letter had been published. Ruiz requested relief from the stay imposed by section 425.16, subdivision (g) to conduct discovery on the issue of publication, but the trial court’s ruling on the anti-SLAPP motion made such discovery unnecessary. In light of our conclusions that both letters were protected under the anti-SLAPP statute and the second letter was not defamatory, we reverse and remand with directions for the trial court to reconsider Ruiz’s request for discovery on the issue only of publication of the first letter.

FACTS

In August 2001, Plaintiffs purchased a house on Port Margate Street in Newport Beach. They intended to raze the existing house on the site and to construct a new house.

Plaintiffs’ house was on one of over 523 lots in a development governed by HVCA,137*137 a nonprofit mutual benefit corporation. HVCA was formed in 1968 to provide “community services and recreational facilities for the general use, benefit and welfare of the owners … of residential lots situated within” that development. Among its purposes was “[t]o examine and approve plans and specifications for dwelling houses and other structures and improvements to be erected within … [the development] or the modification, and/or alteration thereon and/or additions thereto.” HVCA’s board of directors (the Board) is vested with the exercise of its corporate powers and with control over HVCA’s business and affairs.

Plaintiffs’ house was, as were the others in the Harbor View development, subject to a declaration of covenants, conditions and restrictions (CC & R’s) recorded on September 30, 1968 and thereafter amended several times. The CC & R’s established architectural controls over the development enforced by an architectural committee appointed by the Board. Under the CC & R’s, “[n]o building, fence, wall or other structure shall be commenced, erected or maintained …, nor shall any exterior addition to or change or alteration therein, including exterior colors, trim, windows, roofing, patio covers and antennas, be made until the plans and specifications showing the nature, kind, shape, height, materials and location of the same shall have been submitted to and approved in writing as to harmony of external design and location in relation to surrounding structures and topography by the Architectural Committee.”

HVCA promulgated architectural committee guidelines “to provide a procedural and substantive basis for homeowner applicants to construct improvements within the community in a manner which is compatible and in harmony with the existing external design of homes in the community.” The guidelines’ purposes are “to maintain the existing architectural character of this community” and “to attain a continuity of design, which will help maintain appearance and enhance the overall value of all properties.” The guidelines require, among other things, the total square footage of all structures on a lot to not exceed 67 percent of the proposed flat pad area of the lot.

In February 2003, Plaintiffs submitted to the architectural committee conceptual plans to erect a new house on their lot. The committee reviewed the plans on March 19 and recommended denying them. Plaintiffs learned of the denial in a March 25, 2003 letter from Jill Schwalbe of Villageway Management, Inc. (Villageway), the property manager for HVCA. By means of the letter, the architectural committee requested that Plaintiffs submit revised plans and identified 13 recommended modifications, including reduction of house size. The house Plaintiffs had designed for the lot exceeded the maximum square footage permitted by the architectural guidelines by at least 900 square feet.

The March 25 letter requested Plaintiffs to provide information to Villageway and directed them to contact Villageway with any questions or concerns. In response,Ruiz had several telephone conversations with Schwalbe. Ruiz did not believe Schwalbe provided a meaningful explanation for the committee’s denial of Plaintiffs’ plans. According to the complaint, Schwalbe told Ruiz the architectural committee would approve Plaintiffs’ plans if Plaintiffs could establish that other houses in the development had similar designs, features, or materials, but the committee “would not compromise regarding any issue relating to the square footage limitation or the manner of its computation.”

Ruiz attended the next architectural committee meeting to “gain insight into 138*138 the Committee’s reasons for denying my architectural plans.” He asked the committee why it rejected his plans and asked how he could bring the plans within the committee’s standards. One committee member asked Ruiz if he was an attorney.Ruiz responded by asking whether being an attorney would be held against him. No one responded. According to Ruiz, the same committee member said if Ruiz did not agree with the committee’s decision, he could sell his house or sue his architect.Ruiz was asked to put all of his questions to the committee in writing. Ruiz contends he tried to attend subsequent architectural committee meetings, but was told the meetings were open only to those with business before the committee because “homeowners … prefer the privacy of these closed meetings.”

Ruiz attended the Board’s meeting on June 11, 2003 to discuss the rejection of his architectural plans. The Board also told Ruiz to put any questions in writing and advised him the Board intended to enforce the architectural standards as written in the guidelines.

Ruiz prepared a 12-page letter to the architectural committee and the Board dated July 2, 2003 regarding the denial of the plans and expressing “the hope that an understanding and an agreement can be reached.” The letter asserted the architectural committee’s decisions “were largely arbitrary and capricious, based not upon an objective set of established criteria but upon subjective sensibilities of the committee members” and the committee “applied the same subjective preferences as a basis for rejecting many of the items contained in our application.” The letter claimed the architectural committee had engaged in activity which was “inequitable, unreasonable and improper” by failing to consistently apply the 67 percent restriction of the guidelines; asserted the Board had changed the architectural guidelines without notice to the homeowners; and expressed “grave concerns that these actions taken by the architectural committee and board of directors may expose the association to serious liability and potential damages.”

The July 2 letter requested, “[i]n a good faith effort to establish a dialogue,” that the architectural committee respond to 12 requests for information, including production of the homeowner membership log. Plaintiffs made additional requests for information from the Board in a letter dated July 7, 2003.

HVCA’s attorney, Martin Lee, responded to Ruiz in a letter dated July 11, 2003 (the July 11 letter). The second paragraph of the July 11 letter, which Ruiz claims was libelous, stated in full: “Initially, let me tell you how reprehensible I find it that you, as an attorney and a member of the State Bar of California, while attempting to conceal your superior legal knowledge and education as an attorney, undertook to negotiate, monitor, observe, harangue, cajole and intimidate laypersons (the directorship and Architectural Committee of the Harbor View Community Association) who you knew had no knowledge of your superior skill and knowledge as an attorney and member of the State Bar. Your only apparent defense to this reprehensible conduct is recited by you in your letter of July 2, 2003 to the effect that, when asked by the laypersons involved if you were an attorney, you refused to directly answer the query and asked `if being a lawyer would be held against’ you. Such conduct by a member of the Bar is simply unconscionable. State law requires an attorney to be truthful — and this is especially the case when he or she is dealing with laypersons (cf. Business and Professions Code § 6068). As officers of the Court, attorneys have a 139*139 duty to deal honestly and fairly with others (Gionis v. Superior Court [1988] 202 [Cal.App.]3d 786, 248 CR 741). You have egregiously violated these duties.” The July 11 letter then responded to various assertions Ruiz made in the July 2 letter.

Ruiz responded to the July 11 letter in a letter dated July 30, 2003. The July 30 letter denied the accusation that Ruiz had breached his ethical duties, accused the Board of “embark[ing] upon a course of action which only seems to make litigation inevitable,” requested the Board to provide copies of various documents and records, and asked the Board to review the architectural committee’s decision regarding Plaintiffs’ plans. Lee and Ruiz continued to trade sharply worded correspondence for the next several months, culminating in an October 15, 2003 letter (the October 15 letter) from Lee.

Ruiz claims the following portions of the October 15 letter were libelous: “I have been advised that you attend every single meeting of the Board of Directors and sit there taking what appear to be copious notes of ostensibly everything being said by everyone. While you have a right under Civil Code § 1363.05 to attend directors’ meetings, you seem to be the only member of the Harbor View Community Association who has ever so fully availed himself of this `right[.’] [¶] Contrary to what you further say in your letter, the Board of Directors has spent the better part of the past six months answering you questions (most of which are set forth in extremely verbose written correspondence). The directors of the Harbor View Community Association are all unpaid volunteer homeowners. You are not the only member of the Harbor View Community Association and your endless queries (most of which appear completely frivolous) are becoming more and more like the Shakespearian `pound of flesh’ that you feel you are entitled to as revenge for the ostensible temerity of the association’s Architectural Committee in not approving your architectural plans. [¶] When your architectural application was rejected, the Architectural Committee informed you specifically and in writing why it was being denied (principally because the proposed home exceeded the maximum square footage allowed). Since that time, you have made absolutely no attempt to resubmit modified plans that make the proposed home compliant with the existing architectural guidelines. Instead, you have devoted an inordinate amount of time harassing the Harbor View Community Association directorship with cockamamy [sic] document inspection requests and virtually stalking and staring down the directors at their regularly scheduled meetings. For you to infer that somehow the Harbor View Community Association has been unfair to you is like the tea kettle calling the coffee pot black.” (Fn. omitted.)

PROCEEDINGS IN THE TRIAL COURT

Plaintiffs filed this lawsuit in July 2004. Their complaint alleges nine causes of action against HVCA and seeks, among other things, a declaration that the denial of their conceptual plans was “improper, unequitable [sic], unreasonable, arbitrary and in bad faith” and that HVCA is barred or estopped from enforcing the architectural guidelines. The sixth cause of action, brought only by Ruiz, seeks damages for libel and alleges the July 11 letter and the October 15 letter are libelous on their face.

On September 2, 2004, HVCA filed its anti-SLAPP motion.^[2] Although directed 140*140 particularly to the sixth cause of action, the motion moved to strike all “such causes of action pleaded against defendant arising out of acts by defendant in furtherance of its right of petition or free speech … in connection with a public issue.” After filing opposition, Ruiz applied ex parte for relief from the discovery stay imposed by section 425.16, subdivision (g) to conduct discovery related to his libel cause of action. The record does not include a ruling on the application.

On December 10, 2004, the trial court denied the anti-SLAPP motion on the ground HVCA “failed to meet its burden of making a prima facie showing that the two letters which form the basis for plaintiffs’ [sic] libel claim are covered by CCP [section] 425.16.” HVCA timely appealed.

ANALYSIS

I. Statutory Framework

Section 425.16 provides for a special motion to strike “[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 or California Constitution in connection with a public issue.” (§ 425.16, subd. (b)(1).) “The Legislature enacted the anti-SLAPP statute to protect defendants, including corporate defendants, from interference with the valid exercise of their constitutional rights, particularly the right of freedom of speech and the right to petition the government for the redress of grievances.” (Schoendorf v. U.D. Registry, Inc. (2002) 97 Cal.App.4th 227, 235, 118 Cal.Rptr.2d 313.)

In analyzing a section 425.16 motion, the court engages in a two-step process. “First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67, 124 Cal.Rptr.2d 507, 52 P.3d 685.) The moving defendant meets this burden by showing the act underlying the plaintiff’s cause of action comes within section 425.16, subdivision (b)(1). (Equilon Enterprises v. Consumer Cause, Inc., supra, at p. 67, 124 Cal.Rptr.2d 507, 52 P.3d 685.) If the defendant meets this initial burden, the burden then shifts and the plaintiff must show a probability of prevailing on the claim. (Ibid.) The plaintiff must demonstrate the complaint is both legally sufficient and is supported by a prima facie showing of facts sufficient to sustain a favorable judgment if the evidence submitted by the plaintiff is given credit. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89, 124 Cal.Rptr.2d 530, 52 P.3d 703.)

We review de novo whether section 425.16 protects the subject speech and whether Ruiz demonstrated a probability he would prevail on his libel cause of action. (Nagel v. Twin Laboratories, Inc. (2003) 109 Cal.App.4th 39, 44, 134 Cal.Rptr.2d 420.)

II. Did the July 11 Letter and the October 15 Letter Constitute Acts in Furtherance of HVCA’s Right of Petition or Free Speech in Connection with a Public Issue?

A defendant can meet his or her burden by demonstrating the acts underlying 141*141 the plaintiff’s cause of action fit within one of the categories of section 425.16, subdivision (e). (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78, 124 Cal.Rptr.2d 519, 52 P.3d 695.) Section 425.16, subdivision (e) defines an act in furtherance of the defendant’s right of petition or free speech in connection with a public issue to include: “(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; (4) or 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.”

The July 11 letter and the October 15 letter, we conclude, fall within section 425.16, subdivision (e)(4),^[3] which encompasses conduct in furtherance of the exercise of the constitutional right of petition or free speech in connection with an issue of public interest.^[4] In Averill v. Superior Court (1996) 42 Cal.App.4th 1170, 1175, 50 Cal.Rptr.2d 62, a panel of this court concluded the anti-SLAPP statute protects private conversations regarding a public issue. Averill was decided before the Legislature added subdivision (e)(4) to section 425.16, but “lends support to the supposition that subdivision (e)(4) is intended to cover private communications on public issues.” (Wilbanks v. Wolk (2004) 121 Cal.App.4th 883, 897, fn. 4, 17 Cal.Rptr.3d 497.) “Section 425.16, therefore, governs even private communications, so long as they concern a public issue.” (Id. at p. 897, 17 Cal.Rptr.3d 497; see also Terry v. Davis Community Church (2005) 131 Cal.App.4th 1534, 1546, 33 Cal.Rptr.3d 145 [“subdivision (e)(4) applies to private communications concerning issues of public interest”].)

Private letters, such as the July 11 letter and the October 15 letter, are similar to private conversations and should be afforded the same protection. Do the July 11 letter and the October 15 letter concern a public issue or an issue of public interest?

Public 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.'” (Du Charme v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 142*142 107, 115, 1 Cal.Rptr.3d 501 (Du Charme).) In that case, the court held a statement posted on a labor union’s local Web site stating the local’s business manager had been removed for financial mismanagement did not come within section 425.16, subdivision (e)(2) because the statement was not made in connection with an issue under consideration, the business manager having already been removed. (Du Charme, supra, 110 Cal.App.4th at pp. 118-119, 1 Cal.Rptr.3d 501.) The Web site statement did not come within section 425.16, subdivision (e)(3) or (4), the court held, because the statement was not made in connection with a public issue or an issue of public interest. (DuCharme, supra, at p. 119, 1 Cal.Rptr.3d 501.)

In concluding the Web site statement did not fall within section 425.16, subdivision (e)(3) or (4), the court in Du Charme held “that in order to satisfy the public issue/issue of public interest requirement of section 425.16, subdivision (e)(3) and (4) of the anti-SLAPP statute, in 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 p. 119, 1 Cal.Rptr.3d 501.) The Du Charme court did not determine “what limitations there might be on the size and/or nature of a particular group, organization, or community, in order for it to come within the rule we enunciate today.” (Ibid.)

We agree with the analysis of Du Charme and find it applicable here. When the July 11 letter and the October 15 letter were written, Plaintiffs and HVCA were involved in ongoing disputes over approval of Plaintiffs’ conceptual plans, the application of HVCA’s architectural guidelines, and Plaintiffs’ demands for information and documents. Those disputes were of interest to a definable portion of the public, namely, the members of HVCA, because they would be affected by the outcome of those disputes and would have a stake in HVCA governance. Ruiz’s conduct at HVCA board meetings and interaction with board members affected HVCA governance and therefore would also be of interest to community members. The residents of over 523 lots were part of HVCA, a large enough group to come within the requirements of Du Charme. The July 11 letter and the October 15 letter were written in the context of the disputes between Plaintiffs and HVCA, were part of the ongoing discussion over those disputes, and “contributed to the public debate” on the issues presented by those disputes. (Wilbanks v. Wolk, supra, 121 Cal.App.4th at p. 898, 17 Cal.Rptr.3d 497.)

Ruiz argues there was no issue under consideration by the Board when the July 11 letter and the October 15 letter were written because Plaintiffs’ conceptual plans were denied in March 2003. In denying the plans, the architectural committee asked Plaintiffs to submit new plans addressing the committee’s concerns. The controversy over the plans continued for months, and evolved into a controversy over HVCA governance, as Ruiz challenged the architectural committee’s decisions, accused the committee of arbitrarily enforcing the architectural guidelines, asked HVCA to address various issues, and requested information and documents from the Board. Ruiz’s July 2, 2003 letter expressed a desire to “commence a dialogue” with the Board; the July 11 letter and the October 15 letter were written by HVCA’s attorney acting on behalf of 143*143 HVCA and/or the Board and were part of the requested dialogue.

Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 102 Cal.Rptr.2d 205 (Damon) supports our conclusion the July 11 letter and the October 15 letter concerned matters of public interest. In Damon, several members of a homeowners association wrote letters published in the association newsletter and made statements at association board meetings criticizing the association’s manager. (Id.at pp. 471-472, 102 Cal.Rptr.2d 205.) The Court of Appeal held the statements fell within section 425.16, subdivision (e)(3) because they were made in public forums (the newsletter and the board meetings) and in connection with an issue of public interest.^[5] (Damon, supra, 85 Cal.App.4th at pp. 474-475, 102 Cal.Rptr.2d 205.) The statements concerned the issues whether the association should switch to a professional management company and the manager’s competence to manage the association. (Id. at p. 479, 102 Cal.Rptr.2d 205.) Those issues were of public interest to association members because they concerned “the very manner in which this group of more than 3,000 individuals would be governed — an inherently political question of vital importance to each individual and to the community as a whole.” (Ibid.)

Granted, the connection between the statements and the public interest in this case is more attenuated than in Damon. Here, Plaintiffs’ requests for information and documents, and Ruiz’s conduct at board meetings, could be seen as private disputes between Plaintiffs and the Board, or as an effort “`to gather ammunition for another round of [private] controversy'” (Weinberg v. Feisel, supra, 110 Cal.App.4th at pp. 1132-1133, 2 Cal.Rptr.3d 385). But those activities are related to and arise out of the architectural committee’s denial of Plaintiffs’ conceptual plans, and concern the issue whether the architectural guidelines had been evenhandedly enforced, a matter of concern to HVCA members. The focus and primary purpose of the letters concerned HVCA governance and enforcement of its architectural guidelines, issues of concern to the many HVCA members.

The July 11 letter and the October 15 letter are neither tactful nor productive. The writer would have been wise to heed Anthony Trollope’s advice “that no angry letter be posted till four-and-twenty hours will have elapsed since it was written.” (Trollope, The Bertrams (1859) vol. 3, ch. 18.) But affording the July 11 letter and the October 15 letter anti-SLAPP protection furthers the statute’s policy of encouraging public participation in matters of public interest. Accordingly, the trial court erred in concluding HVCA failed to meet its burden of establishing the allegedly defamatory letters came within section 425.16, subdivision (e). We turn then to the issue whetherRuiz met his burden 144*144 of establishing a probability of prevailing on the libel cause of action.

III. Did Ruiz Show a Probability of Prevailing on the Libel Cause of Action?

Ruiz, to meet his burden of showing a probability of prevailing on the libel cause of action, had to “make a prima facie showing of facts that would, if proven, support a judgment in [his] favor.” (Nagel v. Twin Laboratories, Inc., supra, 109 Cal.App.4th 39, 45, 134 Cal.Rptr.2d 420.)

A. Ruiz Met His Burden of Making a Prima Facie Showing the July 11 Letter Was Libelous, but the October 15 Letter Was Nonactionable Hyperbole, Epithet, and Metaphor.

Libel is a “false and unprivileged publication by writing, printing, … 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.) “The sine qua non of recovery for defamation … is the existence of falsehood.” (Letter Carriers v. Austin (1974) 418 U.S. 264, 283, 94 S.Ct. 2770, 41 L.Ed.2d 745.) A statement is libel on its face if it “is defamatory of the plaintiff without the necessity of explanatory matter, such as an inducement, innuendo or other extrinsic fact.” (Civ.Code, § 45a.)

Ruiz alleged the July 11 letter and the October 15 letter are libelous on their face. He argues: (1) the July 11 letter falsely accused him of behaving unconscionably, violating his ethical obligations as an attorney, and bullying and deceiving the board members; and (2) the October 15 letter falsely accused him of committing the crime of stalking. HVCA counters that the letters express nonactionable opinions, hyperbole, and metaphor.

Franklin v. Dynamic Details, Inc. (2004) 116 Cal.App.4th 375, 10 Cal.Rptr.3d 429 (Franklin) lays out the analysis for determining whether the July 11 letter and the October 15 letter are libelous on their face. In resolving that issue, “the question is not strictly whether the published statement is fact or opinion … [r]ather, the dispositive question is whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.” (Id. at p. 385, 10 Cal.Rptr.3d 429.) “[S]atirical, hyperbolic, imaginative, or figurative statements are protected because `the context and tenor of the statements negate the impression that the author seriously is maintaining an assertion of actual fact.'” (Ibid.) “Whether a statement declares or implies a provably false assertion of fact is a question of law for the court to decide [citations], unless the statement is susceptible of both an innocent and a libelous meaning, in which case the jury must decide how the statement was understood.” (Ibid.)

An opinion or legal conclusion is actionable only “`if it could reasonably be understood as declaring or implying actual facts capable of being proved true or false.'” (Franklin, supra, 116 Cal.App.4th at p. 386, 10 Cal.Rptr.3d 429.) Thus, an opinion based on implied, undisclosed facts is actionable if the speaker has no factual basis for the opinion. (Id. at pp. 386-387, 10 Cal.Rptr.3d 429.) An opinion is not actionable if it discloses all the statements of fact on which the opinion is based and those statements are true. (Id. at p. 387, 10 Cal.Rptr.3d 429.) An opinion is actionable if it discloses all the statements of fact on which the opinion is based and those statements are false. (Ibid.) In determining whether a statement is actionable145*145 opinion, we examine the totality of the circumstances, starting with the language of the allegedly defamatory statement itself. (Id. at p. 385, 10 Cal.Rptr.3d 429.)

The July 11 letter expressed the opinions that Ruiz was “reprehensible,” engaged in “unconscionable” conduct, bullied laypersons, and “egregiously violated” his statutory duty as an attorney to be truthful. The factual bases expressed in the letter for those opinions were (1) Ruiz “attempt[ed] to conceal” his “superior legal knowledge and education” from the Board and architectural committee, (2) Ruizknew the Board and architectural committee did not know he was an attorney, and (3) when asked by a member of the architectural committee whether he was a lawyer, Ruiz responded by asking “`if being a lawyer would be held against'” him.

Ruiz met his burden under the anti-SLAPP statute of presenting a prima facie case that the factual assertions supporting the opinions were demonstrably false. His July 2, 2003 letter and his declaration submitted in opposition to the anti-SLAPP motion support a prima facie conclusion he did not conceal he was an attorney. The letter stated: “You may recall, that I was specifically asked to put in writing our concerns and requests after Mr. Green asked if I was a lawyer. While I did not understand what my profession has to do with approval of our plans, I asked if being a lawyer would be held against me. No one answered that question. However, I was told the reason the committee suspected that I was an attorney was based upon representations made by the association’s manager Jill Schwalbe. She stated that during two prior conversations I had with her I repeated verbatim her comments.”Ruiz stated in his declaration submitted in opposition to the motion to strike that during his conversations with Schwalbe, HVCA’s property manager, “Ms. Schwalbe learned that I was an attorney.” In a declaration submitted in support of an ex parte application for relief from the discovery stay, Ruiz stated he disclosed to Schwalbe that he was an attorney.

The statements that Ruiz acted unconscionably and in violation of his ethical duties as a lawyer are not mere hyperbole, epithet, or “subjective expressions of disapproval, devoid of any factual content.” (Ferlauto v. Hamsher (1999) 74 Cal.App.4th 1394, 1404, 88 Cal.Rptr.2d 843.) This becomes clear when the statements are viewed in context. The statements contend Ruiz violated a specific code section based upon identified conduct. The July 11 letter was written by an attorney in “legal verbiage,” including citations to authority, giving the letter’s opinion greater weight to the reader (cf. Franklin, supra, 116 Cal.App.4th at p. 389, 10 Cal.Rptr.3d 429) — if the letter were, in fact, published.

In contrast, however, the allegedly libelous portions of the October 15 letter are just the kind of rhetorical hyperbole, epithets, and figurative statements that are nonactionable. The October 15 letter states Ruiz was seeking a “Shakespearian `pound of flesh,'” making “cockamam[ie]” document inspection requests, and “virtually stalking and staring down the directors at their regularly scheduled meetings.” The term “virtually stalking” cannot fairly be interpreted as an accusation of a crime but, taken in context, was a metaphor used to describe Ruiz’s conduct at the board meetings. (See Franklin, supra, 116 Cal.App.4th at p. 389, 10 Cal.Rptr.3d 429 [statements that plaintiff “`stole'” and “`plagiarized'” data “appear in context as rhetorical hyperbole”]; see also Letter Carriers v. Austin, supra, 418 U.S. at pp. 283-284, 94 S.Ct. 2770 [“`traitor[s]'” understood to mean that plaintiffs’ actions were reprehensible, not that plaintiffs had committed treason]; 146*146 Greenbelt Coop. Pub. Assn. v. Bresler (1970) 398 U.S. 6, 13-14, 90 S.Ct. 1537, 26 L.Ed.2d 6 [“`blackmail'” a vigorous epithet used to describe unreasonable negotiations]; Rosenaur v. Scherer(2001) 88 Cal.App.4th 260, 278-279, 105 Cal.Rptr.2d 674 [calling plaintiff “thief” and “liar” during political campaign was hyperbole].)

B. The Litigation Privilege Does Not Protect the July 11 Letter.

HVCA argues the July 11 letter and the October 15 letter are protected by the litigation privilege of Civil Code section 47, subdivision (b). The privilege applies, however, only when the contemplated litigation is imminent; the privilege does not retroactively protect any and all communication preceding the litigation. (Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 35, 61 Cal.Rptr.2d 518.) As that case notes, “[i]n the present litigious society, there is always at least the potential for a lawsuit any time a dispute arises between individuals or entities.” (Id. at p. 33, 61 Cal.Rptr.2d 518.) The privilege only arises “at the point in time when litigation is no longer a mere possibility, but has instead ripened into a proposed proceeding that is actually contemplated in good faith and under serious consideration as a means of obtaining access to the courts for the purpose of resolving the dispute.” (Id. at p. 39, 61 Cal.Rptr.2d 518.)

The potential for litigation existed, of course, from the outset of the dispute between Plaintiffs and HVCA. But when the July 11 letter was written, litigation was not imminent, the dispute had not ripened into a proposed proceeding, and litigation had not been threatened. Ruiz’s July 2, 2003 letter obliquely asserted the Board’s actions exposed the Board to liability, but did not mention litigation. When the July 11 letter was written, neither Ruiz nor HVCA had written a demand letter. (See Knoell v. Petrovich (1999) 76 Cal.App.4th 164, 170-171, 90 Cal.Rptr.2d 162 [demand letter serving as condition precedent to litigation and all subsequent communications held privileged].) Ruiz had requested a “dialogue,” and the July 11 letter was a response to his request, not a threat that litigation was under serious consideration.

Our conclusion that the litigation privilege does not protect the July 11 letter is consistent with our conclusion that letter falls within section 425.16, subdivision (e)(4). Only subdivision (e), subparts (1) and (2) of section 425.16 are parallel to and co-extensive with the definition of privileged communication under Civil Code section 47, subdivision (b). (See Church of Scientology v. Wollersheim, supra, 42 Cal.App.4th at p. 650, 49 Cal.Rptr.2d 620.) The anti-SLAPP legislation covers a broader definition of communications than the litigation privilege. Thus, while a communication protected by the litigation privilege necessarily would fall within section 425.16, subdivision (e)(1) or (2) (see Briggs v. Eden Council for Hope & Opportunity, supra, (1999) 19 Cal.4th 1106, 1115, 81 Cal.Rptr.2d 471, 969 P.2d 564), the opposite is not true. A communication protected by the anti-SLAPP statute would not necessarily be protected by the litigation privilege. That is the case where, as here, the communication falls within section 425.16, subdivision (e)(4).

C. Ruiz Failed to Meet His Burden of Proving Publication, but Is Entitled to Discovery on the Issue as to the July 11 Letter.

A libel, to be actionable, must be published; i.e., communicated to a third person who understands its defamatory meaning. (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 476.) Ruiz did not meet his burden of showing either 147*147 the July 11 letter or the October 15 letter was published. Publication of the letter to the board members would be privileged under Civil Code section 47, subdivision (c) because they would be interested in the letter. Ruiz argues the initials “rs” found at the end of the July 11 letter suggest a third person with those initials typed the letter. But Ruizdid not present evidence that a person with the initials “rs” typed the letter, or that the person who typed the letter would not be a “person interested” under Civil Code section 47, subdivision (c).

Ruiz requested discovery on the issue of publication. On October 27, 2004, after HVCA filed the special motion to strike, he applied ex parte for an order, or for an order shortening time in which to bring a noticed motion, for relief from the discovery stay in order to conduct discovery on the issue of publication. The record contains no order on the application. In ruling on the anti-SLAPP motion itself, the trial court did not have reason to reconsider Ruiz’s request for discovery because the court denied the motion under the first prong without reaching the issue of probability of success on the libel cause of action.

Under subdivision (g) of section 425.16, the trial court may, for good cause, lift the discovery stay to permit specified discovery limited to the issues raised in the special motion to strike. (Mattel, Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th 1179, 1189-1190, 121 Cal.Rptr.2d 794.) Ruiz timely applied for discovery under subdivision (g) of section 425.16, and we will remand the case for the trial court to consider whether to permit discovery on the issue of publication of the July 11 letter only.

HVCA asserts, without citing authority, that Ruiz waived his right to challenge the denial of his request for discovery by failing to file his own notice of appeal from the denial of the anti-SLAPP motion, akin to a protective cross-appeal. In the case of a protective cross-appeal, the cross-appellant is appealing from a judgment, made appealable under section 904.1, subdivision (a), as protection in the event the appellate court reverses an order granting a new trial or judgment notwithstanding the verdict. (See Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2004) ¶¶ 3:169 to 3:171.1, pp. 3-62 to 3-63 (rev.# 1, 2004).) Here, there was no adverse appealable order or judgment from which Ruiz could file a notice of appeal. His request for discovery can and should be considered along with all the issues raised by HVCA’s appeal from the order denying the anti-SLAPP motion.

DISPOSITION

Ruiz failed to meet his burden of proving a probability of succeeding on his libel claim: He failed to show the July 11 letter had been published and the October 15 letter was defamatory. The letters were protected under section 425.16, subdivision (e)(4). Thus, we reverse the order denying HVCA’s special motion to strike pursuant to section 425.16 and remand with the following directions.

148*148 Ruiz timely requested discovery on the issue of publication, and therefore we remand with directions for the trial court to reconsider Ruiz’s request for discovery, but only as to the July 11 letter. If the trial court denies Ruiz’s request for discovery, then it must grant HVCA’s anti-SLAPP motion. If the trial court permits Ruiz to conduct discovery as to publication of the July 11 letter, then the trial court may reconsider HVCA’s motion to strike that letter under the anti-SLAPP statute in light of discovery results.

Appellant to recover costs incurred on appeal.

WE CONCUR: SILLS, P.J., and BEDSWORTH, J.

[1] SLAPP is an acronym for strategic lawsuit against public participation. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1109, fn. 1, 81 Cal.Rptr.2d 471, 969 P.2d 564.) An order granting or denying a special motion to strike is appealable pursuant to section 425.16, subdivision (j).

[2] The motion initially was set to be heard on October 29, 2004 as that was the earliest date provided by the court clerk. On September 7, the trial court (Judge Monroe) granted HVCA’s ex parte application to advance the hearing date to October 1. But on October 1, the trial court (Judge Banks) determined its calendar was too congested to hear the motion and ordered the matter continued to December 10, 2004, the court’s next available hearing date. The motion therefore was timely heard. (Code Civ. Proc., § 425.16, subd. (f).)

[3] Subparts (1) and (2) of section 425.16, subdivision (e), but not subparts (3) and (4), are co-extensive with the litigation privilege of Civil Code section 47, subdivision (b). (See Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 650, 49 Cal.Rptr.2d 620.) As explained below, the July 11 letter is not protected by the litigation privilege of Civil Code section 47, subdivision (b), and therefore does not fall within section 425.16, subdivision (e)(1) or (2).

[4] A defendant moving to strike a cause of action under section 425.16, subdivision (e)(1) or (2) need not separately demonstrate the statement concerned an issue of public significance because those subparts protect any written or oral statement made in the applicable setting. (Briggs v. Eden Council for Hope & Opportunity, supra, 19 Cal.4th 1106, 1123, 81 Cal.Rptr.2d 471, 969 P.2d 564.) In contrast, subdivision (e)(4) of section 425.16 protects only conduct undertaken “in connection with a public issue or an issue of public interest.” (Code Civ. Proc., § 425.16, subd. (e)(4); see Briggs v. Eden Council for Hope & Opportunity, supra, at p. 1117, 81 Cal.Rptr.2d 471, 969 P.2d 564.)

[5] In Weinberg v. Feisel (2003) 110 Cal.App.4th 1122, 1131, footnote 4, 2 Cal.Rptr.3d 385, the court criticized Damon’s holding the association newsletter was a public forum within the meaning of subdivision (e)(3) of section 425.16. We cite Damon as support only for our conclusion the July 11 letter and the October 15 letter concerned matters of public interest within the meaning of subdivision (e)(4) of section 425.16, which does not require the statements be made in a public forum. Weinberg v. Feisel concluded private communications about private matters do enjoy anti-SLAPP protection and did not address whether private communications about public matters fall within subdivision (e)(4) of section 425.16. (Weinberg v. Feisel, supra, 110 Cal.App.4th at p. 1132, 2 Cal.Rptr.3d 385.) The court that decided Weinberg v. Feisel held in Terry v. Davis Community Church, supra, 131 Cal.App.4th at page 1546, 33 Cal.Rptr.3d 145, subdivision (e)(4) applies to private communications concerning public issues.

Keywords: Anti-SLAPP Motions, Defamation

Palm Springs Tennis Club v. Rangel

86 Cal.Rptr.2d 73 (1999)

Summary by Mary M. Howell, Esq.:

Facts

The association sued two homeowners who allegedly defamed one of the directors running for election. The statements included excerpts from board minutes which allegedly indicated one of the directors had, in the past, “attempted to assault” a homeowner, and that the director “repeatedly raised his voice and insulted” another homeowner. The minutes did not contain the referenced statements. The homeowners “demurred” (sought to have the complaint dismissed) on the basis that the association had no right to bring a defamation action on behalf of individual directors.

Held

For homeowners. If language written about a corporate director cannot be interpreted as saying anything about the way the director performs his or her duties, the corporation has no right to bring an action for defamation. The statements in question, while critical of the directors who were running for re-election, did not pertain to the way in which the association was governed. Accordingly, the association had no cause of action for defamation.

*** End Summary ***

Palm Springs Tennis Club v. Rangel

86 Cal.Rptr.2d 73 (1999)

75*75 Best, Best & Krieger, LLP, and Douglas S. Phillips, Rancho Mirage, for Plaintiff and Appellant.

Vorzimer, Masserman & Ecoff, PC, Andrew W. Vorzimer, Beverly Hills, Charles David Trejo and Brandon T. Nichols for Defendant and Respondent Delia Rangel.

Byron G. Cornelius, Palm Springs, for Defendant and Respondent Morris Fisher.

OPINION

RAMIREZ, P.J.

Plaintiff Palm Springs Tennis Club (hereinafter PSTC) appeals from a judgment entered after the defendants’ demurrers to the second amended complaint were sustained without leave to amend. PSTC complained that statements defendants published about Warren Low, its president and chairman of the board, were libelous of PSTC. The trial court determined the second amended complaint failed to state a cause of action for libel. We agree and affirm.

FACTS AND PROCEDURAL HISTORY

On April 16, 1997, PSTC filed a complaint for libel against defendant Delia Rangel (hereinafter Rangel). On June 25, 1997, PSTC filed a first amended complaint for libel subjoining Morris Fisher (hereinafter Fisher) as an additional defendant. The defendants’ demurrers to the first amended complaint were sustained with leave to amend.

PSTC’s second amended complaint, filed on October 9, 1997, alleges: PSTC is a nonprofit corporation which, through its board of directors, operates a time-share resort known as the Palm Springs Tennis Club for the mutual benefit of its owners and members. Warren Low was and is the president, a member of the board, and the chairman of the board of PSTC, in addition to owning a time-share interest in PSTC. In January 1997 defendants published two documents attached as exhibits to the second amended complaint,^[1] which contain the allegedly false statements, “Below are some items from PSTC Board Meeting Minutes. Please read and determine if you want to re-elect … Low…. [¶] … [¶] Mar. 11, 1995, Low attempts to assault Mrs. Rangel. He repeatedly raises his voice and insults Dr. Gan, the only female Board Member.” (Italics omitted; underscoring in original.) The minutes from March 11, 1995, do not reference any such assault, voice raising or insults. The statements are libelous on their face and expose PSTC to hatred, contempt, ridicule and obloquy. The statements reflect poorly on PSTC and its board because they accuse the president and chairman of the board, while acting in his capacity as such, of attempting to commit an assault, which is a crime, during a board meeting. The statements concern the manner of performance of the president of the PSTC of the duties and responsibilities of that office, relate to the president in his official capacity as president and director of PSTC and relate directly to the trade and business of PSTC. The statements were seen by numerous PSTC owners in connection with a February 22, 1997, board of directors election. The statements have a deleterious effect on PSTC’s ability to attract qualified board members, have cast doubt on the credibility and effectiveness of board members 76*76 and have reduced the resale value of time-share ownership by creating a negative perception in the minds of potential buyers, thereby having a natural tendency to disadvantageously affect PSTC in its business and to affect its credit and property.

Rangel responded by filing both a demurrer and a motion to strike. Fisher joined in both motions. The demurrers were based upon the failure of the complaint to state a cause of action because PSTC lacks standing to sue on the facts alleged and because no “colloquium” was alleged which would make the statements defamatory as to PSTC. On December 15, 1997, the court sustained the demurrers without leave to amend and thereafter determined the motions to strike to be moot. The judgment dismissing the second amended complaint was filed on December 29,1997.

DISCUSSION

On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, we give the complaint a reasonable interpretation, and treat the demurrer as admitting all material facts properly pleaded, but do not assume the truth of contentions, deductions or conclusions of law. A trial court errs in sustaining a demurrer when the plaintiff has stated a cause of action under any possible legal theory, and abuses its discretion in sustaining a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967, 9 Cal.Rptr.2d 92, 831 P.2d 317.)

The question in the instant case is whether the allegedly defamatory statement could reasonably be interpreted as having been made against the corporate plaintiff, PSTC. In other words, do statements in a campaign flyer relating to the election of members to the PSTC Board of Directors, that “Low attempted] to assault Mrs. Rangel” and “repeatedly raise[d] his voice and insult[ed] Dr. Gan, the only female Board Member,” (emphasis omitted) expose PSTC to hatred, contempt, ridicule, or obloquy, or cause it to be shunned or avoided, or have a tendency to injure it in its business?^[2]

Libel is recognized as either being per se (on its face), or per quod (literally meaning, “whereby”), and each requires a different standard of pleading. If no reasonable reader of a publication could impute to a statement therein a meaning which tended to harm the reputation of the plaintiff in any of the respects enumerated in Civil Code section 45,^[3] then there is no libel at all. (Barnes-Hind, Inc. v. Superior Court (1986) 181 Cal. App.3d 377, 386, 226 Cal.Rptr. 354.) If a defamatory meaning appears from the language itself without the necessity of explanation or the pleading of extrinsic facts, there is libel per se. (MacLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 549, 343 P.2d 36.) If, however, the defamatory meaning would appear only to readers who might be able to recognize it through some knowledge of specific facts and/or circumstances, not discernible from the face of the publication, and which are not matters of common knowledge rationally attributable to all reasonable persons, then the libel cannot be libel per se but 77*77 will be libel per quod. (Barnes-Hind, Inc. v. Superior Court, supra, 181 Cal. App.3d 377, 387, 226 Cal.Rptr. 354.) Whether a statement can reasonably be given any defamatory interpretation is a legal question that we must resolve by determining the sense or meaning of the statements, under all the circumstances attending the publication, according to the natural and popular construction which would be ascribed to them by the average reader. (MacLeod v. Tribune Publishing Co., supra, 52 Cal.2d 536, 546-547, 343 P.2d 36.)

We recognize that corporate entities, such as PSTC, may bring actions for defamation. (Vegod Corp. v. American Broadcasting Companies, Inc. (1979) 25 Cal.3d 763, 770, 160 Cal.Rptr. 97, 603 P.2d 14.) Nonetheless, if language written about a corporate officer cannot be interpreted as saying anything about the way that officer performs his or her duties and responsibilities as an officer of the corporation, so as to have a natural tendency to affect the corporation disadvantageously in its business, the corporation has no right of action. Stated another way, words written about a corporate officer give no right of action to the corporation unless spoken or written in direct relation to the trade or business of the corporation. (Washburn v. Wright (1968) 261 Cal.App.2d 789, 793-794, 68 Cal.Rptr. 224.)

On their face, the allegedly libelous statements obviously do not directly relate to the trade or business of PSTC. The statements, buried in campaign literature regarding the election of members to PSTC’s board of directors, are written not about the board as a whole or its ability to function adequately. Rather, the statements are written about Warren Low, urging that he should not be re-elected, but should be replaced by a better candidate. The statements are made about Low in his capacity as a candidate for the board and do not involve PSTC as a corporation at all, the allegations in the complaint notwithstanding. Further, the specific statements complained of do not implicate any relationship between PSTC and Low at the time the bad acts were allegedly committed. Given their context, we cannot envision how any reasonable reader could ascribe from these statements any direct relationship to PSTC’s trade or business.

The worst that can be inferred about PSTC from the statements is that a person who behaved in an unruly manner at one of its board meetings had, at some point or points in time, been elected by the member-owners to serve on the board of directors. However, on their face, the statements were made in an election flyer urging that unruly man’s ouster because of his past behavior, not any conduct of PSTC’s. The suggestion is the publisher of the statement believes the memberowners made a poor choice in the last election. The above inference is patently not defamatory of PSTC. Its allegations to the contrary are not sufficient to withstand demurrer when they contradict the unambiguous meaning of the flyer attached as an exhibit and incorporated into the complaint as the basis for the libel claim. (Hill v. City of Santa Barbara (1961) 196 Cal.App.2d 580, 586, 16 Cal.Rptr. 686.)

Having determined that the average reader could not understand these allegedly libelous statements to have been made in direct relation to the trade or business of PSTC on their face, we conclude that plaintiff has not pled a case of libel per se and must agree with the trial court that under the circumstances, PSTC cannot do so.

We now decide whether PSTC has stated a cause of action for libel per quod. In pleading a case of libel per quod the plaintiff cannot assume that the court has access to the reader’s special knowledge of extrinsic facts but must specially plead and prove those facts.^[4] (Barnes-Hind, 78*78 Inc. v. Superior Court, supra, 181 Cal.App.3d 377, 387, 226 Cal.Rptr. 354; see also Martin v. Sutter (1922) 60 Cal. App. 8, 13, 212 P. 60 [to establish a case for libel per quod, plaintiff must prove that the publisher of the words intended they should be understood as imputing wrongdoing or wrong conduct to plaintiff and that the words were understood in that fashion by those who read them].)

There are no allegations in the complaint that the readers of this document had any special knowledge of facts from which they could discern comments made about Warren Low in campaign literature were defamatory of PSTC. There are no allegations how the readers would have known the publishers intended to impute Low’s wrongdoing to PSTC nor are there any allegations the readers had been provided with the board meeting minutes. The second amended complaint therefore fails to adequately state a cause of action for libel per quod. Accordingly, it follows, on the facts alleged, the ostensibly defamatory statements cannot be reasonably interpreted as having been made against the corporate plaintiff, PSTC, under any theory of libel. The demurrer to the second amended complaint was properly sustained.

Given the nature and context of the statements, absent some very strange circumstance, the only intent which can be imputed to the publishers is the intent to defeat Low’s re-election to the board. Hence, we cannot conceive of how PSTC might amend its complaint to state any cause of action for libel against defendants. However, we need not speculate on that point. While a plaintiff need not request leave to amend in order to preserve on appeal the issue of whether the court abused its discretion in sustaining a demurrer without leave to amend (Code Civ. Proc., § 472c), on appeal the plaintiff does bear the burden of proving there is a reasonable possibility the defect in the pleading can be cured by amendment. (Blank v. Kirwan(1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.) “`… Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading….’ [Citation.]” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349, 134 Cal.Rptr. 375, 556 P.2d 737.) Having made no attempt to indicate how the complaint may have been amended to state a cause of action under any theory of libel (or any theory at all), PSTC has failed to establish that the trial court abused its discretion.

DISPOSITION

The judgment of dismissal is affirmed. Defendants to recover their costs on appeal.

RICHLI, J., and GAUT, J., concur.

[1] The exhibits are not attached to the second amended complaint in the clerk’s transcript. We therefore refer to the exhibits to the first amended complaint, and assume they are identical.

[2] We recognize that plaintiff also asserts PSTC was directly libeled by the campaign flyer because it makes direct and false claims about the records of the corporation, i.e. that the minutes contain information they do not. However, as with the statements regarding Low, as will be shown, infra, if the reader of the flyer has no knowledge of the actual contents of the minutes, the flyer cannot be interpreted as being libelous to PSTC.

[3] “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.)

[4] PSTC, citing Semple v. Andrews (1938) 27 Cal.App.2d 228, 81 P.2d 203, asserts it need only allege that the libelous words were “spoken `of and concerning the plaintiff,'” which it has done. This would be true if the words charged were libelous in themselves. (Id. at p. 234, 81 P.2d 203.) However, this not being the case, PSTC bears a greater burden of pleading. (Barnes-Hind, Inc. v. Superior Court, supra, 181 Cal.App.3d 377, 387, 226 Cal.Rptr. 354.)

Keywords: Defamation

Damon v. Ocean Hills Journalism Club

85 Cal.App.4th 468

Summary by Mary M. Howell, Esq.:

Facts

An association manager sued an association club, which produced a newsletter critical of the manager’s performance, for defamation. The club responded by filing an “anti-SLAPP” motion. (“SLAPP” stands for “strategic lawsuit against public participation.” An anti-SLAPP motion asks the court to strike a complaint when that complaint is filed for the purpose of chilling the defendants’ constitutional rights.)

Held

For club. After noting that the association was comprised of more than 1600 homes, the court observed that to prevail on an anti-SLAPP motion, the manager had to demonstrate that the complaint was based on “an[] act in furtherance of the person’s right of petition [to the courts or legislature] or free speech… on a matter of public interest.” Further, the “free speech” must consist of writings or statements made “in a place open to the public or in a public forum….”

The court held that board meetings (at least for this large association) constitute a “public forum” for the purposes of the anti-SLAPP statute, as was the newsletter. The manager argued that the newsletter only represented the views of a minority of the members, but the court ruled that even such minority view publications were entitled to anti-SLAPP protection.

Further, the statements were a matter of “public interest” because the subject (whether to continue the manager’s tenure) was a matter which “concerned the very manner in which this group of more than 3000 individuals would be governed….”

NOTE

Anti-SLAPP motions are one of the most often-employed defenses in lawsuits arising from association disputes. While there are other grounds for bringing such a motion (see Ruiz v. Harbor View Community Ass’n.), the portion of the statute discussed in Damon is the more frequently encountered.

*** End Summary ***

Damon v. Ocean Hills Journalism Club

102 Cal.Rptr.2d 205 (2000)

85 Cal.App.4th 468

206*206 Laturno & Graves, David W. Graves and G. Ehrich Lenz, San Diego, for Plaintiff and Appellant.

Bragg, Short, Serota & Kuluva, Newport Beach, William P. Harris, III, San Diego, Lori D. Serota, Newport Beach, and Henry Nicholls, for Defendants and Respondents Ron Terry and Barney Feldman.

Gray, Cary, Ware & Freidenrich, Guylyn R. Cummins, Marcelle E. Mihaila and Joann F. Peters, San Diego, for Defendants and Respondents Ocean Hills Journalism Club, Estate of Jack Hess, Rosmarie Treher, Sherry Marsh, Art Rosenberg, Estate of James J. Nihan, and Joe Grant.

Certified for Partial Publication.^[1]

HALLER, J.

Dennis E. Damon, a former manager of a homeowners association, brought a defamation complaint against several of the association members, two Board of Directors 207*207 members, and a private homeowners association club.^[2] The trial court granted defendants’ motion to strike the complaint under California’s anti-SLAPP statute. (Code Civ. Proc., § 425.16.) Damon appeals.

In the published portion of this decision, we hold the trial court properly determined the anti-SLAPP statute applied because the evidence showed the alleged defamatory statements were made “in a place open to the public or in a public forum” and concerned “an issue of public interest” within the meaning of Code of Civil Procedure section 425.16, subdivision (e)(3). In the unpublished portion of the opinion, we conclude Damon failed to satisfy his burden to show a probability he would prevail on his claims at trial, and failed to show the trial court erred in refusing to grant him relief from the statutory discovery stay.

FACTS

Leisure Village at Ocean Hills is a planned development residential community for seniors, consisting of 1,633 homes, a golf course and many other recreational facilities. The residents are members of the Ocean Hills Country Club Homeowners Association (Association), which is governed by a seven-member elected Board of Directors (Board). The Board’s duties include managing all aspects of the Association, including security, maintenance, and the selection and removal of officers and employees. The Association’s annual budget generally exceeds $3 million.

In 1994 through 1996, a professional company managed the Association under the Board’s direction. In February 1996, the Board terminated these services and chose to become self-managed. The Board hired Damon, a retired United States Marine Corps officer, as its general manager. Damon had previously served as the Association’s general manager under the direction of various professional management companies. Thereafter, Damon managed the Association’s day-to-day operations under the Board’s direction and supervised the approximately 60 Association employees.

By late 1996, many homeowners were displeased with Damon’s management style and wanted to return to professional management. The homeowners were concerned about Damon’s handling of numerous aspects of the Association, including the security department, employee relations, maintenance activities, and contractor selection. These homeowners began to express their views in articles, editorials, and letters to the editor in the Village Voice newsletter, which was published by a private homeowners club (Journalism Club) and was circulated to Association members and local businesses. The homeowners criticized Damon’s competency to manage the Association and urged residents to replace Damon with a professional management company. The Village Voice was one of two newsletters for Ocean Hills residents; the other newsletter was the Board’s official publication.

In March 1997, several Journalism Club members met with the Association’s security department employees (many of whom were also Ocean Hills residents), who complained about Damon’s management policies. When Damon learned of the meeting, he reminded the employees they were required to follow grievance procedures outlined in the personnel manual, rather than directing their complaints to Association members.

The 1996/1997 Board supported Damon’s continued service. But in August 1997, the Association held the annual Board member elections, and the residents elected several new directors who wanted 208*208 to return to professional management, including respondents Terry and Feldman. Terry and Feldman thereafter made comments during Board meetings that were critical of Damon’s performance as general manager, and questioned Damon’s competency and veracity. Additionally, Terry, who was the Board member responsible for overseeing the security department, authored memoranda discussing problems with Damon’s management of that department and criticizing Damon’s overall performance.

By the end of 1997, the senior citizen residents of Ocean Hills were largely split into two camps: those who favored Damon’s continued service and those who wantedDamon terminated as general manager. One homeowner characterized the highly emotional atmosphere surrounding this dispute as a “war zone with verbal salvo[s] being lobbed back and forth,” reflecting feelings of “hate and discontent” among the homeowners. Most residents were aware that the Village Voice publisher fell into the camp supporting Damon’s termination.

At about this same time, Damon wrote an article in the official Association newsletter discussing the advantages and disadvantages of self-management, and urging the residents to maintain their selfmanaged governance status. The article was contained in Damon’s regular monthly column that appeared in this newsletter.

In early 1998, some homeowners who supported Damon initiated a recall election to remove Terry and Feldman. The recall effort was unsuccessful; a majority of the homeowners supported Terry and Feldman. Damon thereafter notified the Association he did not intend to renew his contract. The Board declined his offer to continue his employment on a monthly basis until a replacement could be found. The homeowners later voted to return to professional management.

Damon then filed a defamation complaint against (1) the six Association members who had authored letters or articles published in the Village Voice criticizingDamon’s performance; (2) Board members Feldman and Terry; and (3) the Village Voice publisher (the Journalism Club).

Defendants successfully moved to strike Damon’s complaint under the anti-SLAPP statute, Code of Civil Procedure section 425.16 (section 425.16). The trial court found (1) Damon’s complaint was subject to the anti-SLAPP statute because it arose from defendants’ exercise of their free speech rights in connection with a public issue; and (2) Damon failed to show it was probable he would prevail on his claims because (a) he was a “limited-purpose” public figure who failed to demonstrate actual malice; and (b) the alleged defamatory statements were privileged and/or nonactionable opinions. Damon appeals.

DISCUSSION

In 1992, the Legislature enacted section 425.16 to provide a procedure for a court “to dismiss at an early stage nonmeritorious litigation meant to chill the valid exercise of the constitutional rights of freedom of speech and petition in connection with a public issue. [Citation.]” (Sipple v. Foundation for Nat. Progress (1999) 71 Cal. App.4th 226, 235, 83 Cal.Rptr.2d 677.) This type of nonmeritorious litigation is referred to under the acronym SLAPP, or strategic lawsuit against public participation. (Ibid.) In 1997, the Legislature added a provision to section 425.16 mandating that courts “broadly” construe the anti-SLAPP statute to further the legislative goals of encouraging participation in matters of public significance and discouraging abuse of the judicial process. (§ 425.16, subd. (a).)

When a plaintiff brings a SLAPP suit, the defendant may immediately move to strike the complaint under section 425.16. To prevail on this motion, the defendant must “make an initial prima facie showing that plaintiffs suit arises from an act in furtherance of defendant’s right of petition or free speech.” (Braun v. 209*209 Chronicle Publishing Co. (19987) 52 Cal. App.4th 1036, 1042-1043, 61 Cal.Rptr.2d 58.) If this burden is met, the plaintiff must establish a reasonable probability he or she will prevail on the merits. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 824-825, 33 Cal.Rptr.2d 446.) In determining whether each party has met its burden, the trial court must “consider the pleadings, and supporting and opposing affidavits . . . .” (§ 425.16, subd. (b)(2).) These determinations are legal questions, and we review the record de novo. (Matson v. Dvorak (1995) 40 Cal.App.4th 539, 548, 46 Cal.Rptr.2d 880.)

Under these standards, we examine the record to determine whether the court properly granted defendants’ motion to strike under section 425.16.

I. Damon’s Defamation Claims Come Within the Anti-SLAPP Statute

Section 425.16, subdivision (b)(1) states that the statute applies when the cause of action arises from “any act . . . in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue.. . .” (Italics added.) Section 425.16, subdivision (e) defines this italicized phrase as including four categories. The first two categories pertain to statements or writings made before, or in connection with, a “legislative, executive or judicial body, or any other official proceeding….” (§ 425.16, subd. (e)(1), (2).) The third category involves statements or writings made “in a place open to the public or in a public forum.” (§ 425.16, subd. (e)(3).) The fourth category includes “any other conduct in furtherance of free speech or petition rights. (§ 425.16, subd. (e)(4).) The latter two categories require a specific showing the action concerns a matter of public interest; the first two categories do not require this showing. (Briggs v. Eden Council For Hope & Opportunity (1999) 19 Cal.4th 1106, 1117-1118, 81 Cal.Rptr.2d 471, 969 P.2d 564.)

As explained below, we conclude the alleged defamatory statements identified inDamon’s complaint fall within the third statutory category: “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 . . . .”^[3] (§ 425.16, subd. (e)(3).) The two locations where the alleged defamatory statements were made—at the Board meetings and in the Village Voice newsletter—were open to the public and constituted “public forums.” Additionally, because each of the allegedly defamatory statements concerned the manner in which a large residential community would be governed, they concerned “issue[s] of public interest.” (§ 425.16, subd. (e)(3).)

A. Public Forum

A “public forum” is traditionally defined as a place that is open to the public where information is freely exchanged. (See Clark v. Burleigh (1992) 4 Cal.4th 474, 482, 14 Cal.Rptr.2d 455, 841 P.2d 975.) The Board meetings fit into this definition. The Board meetings were televised and open to all interested parties, and the meetings served as a place where members could communicate their ideas. Further, the Board meetings served a function similar to that of a governmental body. As our Supreme Court has recognized, owners of planned development units “comprise a little democratic subsociety. . . .” (Nahrstedt v. Lakeside Village Condominium Assn.(1994) 8 Cal.4th 361, 374, 33 Cal.Rptr.2d 63, 878 P.2d 1275; see Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 651, 191 Cal. Rptr. 209.) In exchange for the benefits of common ownership, the residents elect an legislative/executive board and delegate powers to this board. This delegation concerns not only activities conducted in the common areas, but also extends to life 210*210 within “the confines of the home itself.” (Nahrstedt v. Lakeside Village Condominium Assn., supra, 8 Cal.4th at p. 373, 33 Cal.Rptr.2d 63, 878 P.2d 1275) A homeowners association board is in effect “a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.” (Cohen v. Kite Hill Community Assn., supra, 142 Cal.App.3d at p. 651, 191 Cal.Rptr. 209.)

Because of a homeowners association board’s broad powers and the number of individuals potentially affected by a board’s actions, the Legislature has mandated that boards hold open meetings and allow the members to speak publicly at the meetings. (Civ.Code, §§ 1363.05, 1363; 1350-1376.) These provisions parallel California’s open meeting laws regulating government officials, agencies and boards. (Ralph M. Brown Act, Gov.Code, § 54950 et seq.) Both statutory schemes mandate open governance meetings, with notice, agenda and minutes requirements, and strictly limit closed executive sessions. (See, e.g., Civ.Code, § 1363.05, subd. (b).)

The Board here played a critical role in making and enforcing rules affecting the daily lives of Ocean Hills residents. Those rules were promulgated at Board meetings, which were televised, open to all Association members, and served as a place for open discussion among directors and members. Approximately 3,000 residents were affected by the policies adopted at Board meetings. On this record, the Board meetings were “public forums.” (See Foothills Townhome Assn. v. Christiansen(1998) 65 Cal.App.4th 688, 695-696, 76 Cal.Rptr.2d 516.)

The Village Voice newsletter was also a “public forum” within the meaning of section 425.16, subdivision (e)(3). Under its plain meaning, a public forum is not limited to a physical setting, but also includes other forms of public communication. (See American Heritage Dict. (New College ed.1981) p. 518.) The stated purpose of the Village Voice newsletter was to “communicate information of interest and/or concern to the residents.” The newsletter was distributed to the approximately 3,000 OceanHills residents and neighboring businesses. Further, although most of the articles and letters were critical of Damon’s management, the Village Voice publisher also solicited contrary opinions, printed at least two letters with different viewpoints, and included articles on many other Association-related topics (such as a series on proposed CC & R amendments).

Damon argues the Village Voice newsletter cannot be considered a “public forum” because it was essentially a mouthpiece for a small group of homeowners who generally would not permit contrary viewpoints to be published in the newsletter.

Even assuming the record supports this characterization, these facts do not take the publication outside of the anti-SLAPP statutory protection. First, numerous courts have broadly construed section 425.16, subdivision (e)(3)’s “public forum” requirement to include publications with a single viewpoint. (See Macias v. Hartwell(1997) 55 Cal.App.4th 669, 674, 64 Cal. Rptr.2d 222 [union campaign flyer is a “recognized public forum under the SLAPP statute”]; see also Metabolife Internal, Inc. v. Wornick (S.D.Cal.1999) 72 F.Supp.2d 1160, 1165 [“a widely disseminated television broadcast . . . is undoubtedly a public forum”]; Sipple v. Foundation For Nat. Progress, supra, 71 Cal. App.4th at p. 238, 83 Cal.Rptr.2d 677 [assuming that “Mother Jones” magazine is a public forum within the meaning of the anti-SLAPP statute]; Foothills Townhome Assn. v. Christiansen, supra, 65 Cal. App.4th at pp. 695-696, 76 Cal.Rptr.2d 516; Tate, California’s Anti SLAPP Legislation: A Summary of and, Commentary on its Operation and Scope (2000) 33 Loy. L.A. L.Rev. 801, 828-832; see also Averill v. Superior Court (1996) 42 Cal.App.4th 1170, 50 Cal.Rptr.2d 62.)

211*211 We agree with this approach. The Village Voice was a public forum in the sense that it was a vehicle for communicating a message about public matters to a large and interested community. All interested parties had full opportunity to read the articles in the newsletter. Although the Village Voice newsletter may not have offered a “balanced” view, the Association’s other newsletter—the Board’s official newsletter—was the place where Association members with differing viewpoints could express their opposing views. It is in this marketplace of ideas that the Village Voice served a very public communicative purpose promoting open discussion—a purpose analogous to a public forum. Given the mandate that we broadly construe the anti-SLAPP statute, a single publication does not lose its “public forum” character merely because it does not provide a balanced point of view.

This construction comports with the fundamental purpose underlying the anti-SLAPP statute, which seeks to protect against “lawsuits brought primarily to chill the valid exercise of constitutional rights” and “abuse of the judicial process….” (§ 425.16, subd. (a).) This purpose would not be served if we were to construe the statute to make section 425.16, subdivision (e)(3) inapplicable to all newspapers, magazines, and other public media merely because the publication is arguably “one-sided.” This is particularly true because section 425.16, subdivision (e)(3) requires not only that the statement be made in a public forum, but also that it concern an issue of public interest. Further, because section 425.16, subdivision (e)(4) includes conduct in furtherance of free speech rights, regardless whether that conduct occurs in a place where ideas are freely exchanged, it would be anomalous to interpret section 425.16, subdivision (e)(3) as imposing that requirement merely because the challenged speech is an oral or written statement.

We recognize that two courts have more narrowly construed section 425.16, subdivision (e)(3)’s “public forum” requirement, but we are not persuaded this is the correct approach. (See Zhao v. Wong (1996) 48 Cal.App.4th 1114, 55 Cal.Rptr.2d 909, overruled on other grounds in Briggs v. Eden Council For Hope & Opportunity, supra, 19 Cal.4th at p. 1107, 81 Cal. Rptr.2d 471, 969 P.2d 564 (Zhao); Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 37 Cal.App.4th 855, 863, 44 Cal.Rptr.2d 46, fn. 5 (Lafayette Morehouse).)

In Lafayette Morehouse, the plaintiff sued the publisher of the San Francisco Chronicle newspaper, alleging the newspaper printed defamatory articles. (Lafayette Morehouse, supra, 37 Cal.App.4th at p. 863, 44 Cal.Rptr.2d 46.) The court found the challenged statements fell within section 425.16, subdivision (e)(2) because they concerned a matter that was pending before a legislative body. (Id. at pp. 862-863, 44 Cal.Rptr.2d 46.) The court thus declined to reach the defendant publisher’s alternate argument that the newspaper constituted a “public forum” under section 425.16, subdivision (e)(3). (Id. at p. 863, fn. 5, 44 Cal.Rptr.2d 46.) In dicta, however, the court stated it found the publisher’s argument “dubious” because “[n]ewspaper editors or publishers customarily retain the final authority on what their newspapers will publish in letters to the editor, editorial pages, and even news articles, resulting at best in a controlled forum not an uninhibited `public forum.'” (Ibid.)

In Zhao, the plaintiff sued an individual for defamation based on the defendant’s statements made privately to a San Jose Mercury newspaper reporter. Not surprisingly, the court concluded that such “private” statements did not occur in a “public forum” within the meaning of section 425.16, subdivision (e)(3). (Zhao, supra,48 Cal.App.4th at p. 1131, 55 Cal. Rptr.2d 909.) Although further discussion on this matter was arguably unnecessary, the court went on to conclude that the San Jose Mercury newspaper (which published the statements) was also not a public forum.212*212 (Ibid.) Relying on Lafayette Morehouse’s dicta and expressly applying a “narrow definition” of the statutory phrase, the Zhao court reasoned that a public forum “refers typically to those places historically associated with First Amendment activities, such as streets, sidewalks, and parks,” and has been extended only to other public facilities open for certain limited purposes such as libraries and schools. (Id. at pp. 1126-1127, 55 Cal.Rptr.2d 909.) The court further relied on Lafayette Morehouse‘s statements that a private newspaper cannot as a matter of law constitute a public forum because the publisher has ultimate control over the newspaper’s message. (Id. at pp. 1126, 1131, 44 Cal.Rptr.2d 46.) Noting that the phrase “public forum” potentially triggers a more “elastic” definition, the Zhao court expressly declined to adopt this definition and instead adhered to the more “restricted” approach. (Id. at pp. 1125, 1127, 55 Cal.Rptr.2d 909.)

Both Zhao and Lafayette Morehouse predate the 1997 amendment requiring a broad interpretation of section 425.16. In adopting that amendment, the Legislature expressly intended to overrule Zhao‘s narrow view of the statute. (See Briggs v. Eden Council for Hope & Opportunity, supra, 19 Cal.4th at p. 1120, 81 Cal.Rptr.2d 471, 969 P.2d 564.) Moreover, as at least one commentator has noted, the Zhao andLafayette Morehouse court’s conclusions appear to be at odds with the definition of a “public forum” under the plain meaning of the phrase and under the California Constitution. (See Tate, California’s Anti SLAPP Legislation: A Summary of and Commentary on its Operation and Scope, supra, 33 Loy. L.A.L.Rev. at pp. 828-832.) Read in context of the entire statutory scheme, a “public forum” includes a communication vehicle that is widely distributed to the public and contains topics of public interest, regardless whether the message is “uninhibited” or “controlled.”

Because the Village Voice newsletter was a vehicle for open discussion of public issues and was widely distributed to all interested parties, it was a “public forum.”

B. Public Issue

In addition to the “public forum” requirement, defendants were also required to show the topics of the allegedly defamatory statements concerned “issue[s] of public interest.” (§ 425.16, subd. (e)(3).) The record shows defendants satisfied this element.

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 impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity. (See Macias v. Hartwell, supra, 55 Cal.App.4th at p. 674, 64 Cal.Rptr.2d 222; Church of Scientology v. Wollersheim(1996) 42 Cal.App.4th 628, 650-651, 49 Cal.Rptr.2d 620.) “`Matters of public interest . . . include activities that involve private persons and entities, especially when a large, powerful organization may impact the lives of many individuals.'” (Macias v. Hartwell, supra, 55 Cal. App.4th at p. 674, 64 Cal.Rptr.2d 222.) In Macias, the court found that campaign statements made during a union election constituted a “public” issue because the statements affected 10,000 union members and concerned a fundamental political matter—the qualifications of a candidate to run for office. (Id. at pp. 673-674, 64 Cal.Rptr.2d 222.)

As detailed below, each of the alleged defamatory statements concerned (1) the decision whether to continue to be selfgoverned or to switch to a professional management company; and/or (2) Damon’s competency to manage the Association. These statements pertained to issues of public interest within the Ocean Hillscommunity. Indeed, they concerned the very manner in which this group of more than 3,000 individuals would be governed—an 213*213 inherently political question of vital importance to each individual and to the community as a whole. (See Chantiles v. Lake Forest II Master Homeowners Assn. (1995) 37 Cal.App.4th 914, 922, 45 Cal. Rptr.2d 1.) Moreover, the statements were made in connection with the Board elections and recall campaigns. “The right to speak on political matters is the quintessential subject of our constitutional protections of the right of free speech. `Public discussion about the qualifications of those who hold or who wish to hold positions of public trust presents the strongest possible case for applications of the safeguards afforded by the First Amendment.'” (Matson v. Dvorak, supra, 40 Cal.App.4th at p. 548, 46 Cal.Rptr.2d 880; accord Conroy v. Spitzer (1999) 70 Cal.App.4th 1446, 1451, 83 Cal.Rptr.2d 443 [the defendant’s “statements obviously fell within the purview of section 425.16 because they addressed a matter of public concern—a candidate’s qualifications and conduct in office”].)

Although the allegedly defamatory statements were made in connection with the management of a private homeowners association, they concerned issues of critical importance to a large segment of our local population. “For many Californians, the homeowners association functions as a second municipal government. . . .” (Chantiles v. Lake Forest II Master Homeowners Assn., supra, 37 Cal.App.4th at p. 922, 45 Cal.Rptr.2d 1.) Given the size of the Ocean Hills community, the nature of the challenged statements as involving fundamental choices regarding future management and leadership of the Association, and our Legislature’s mandate that homeowner association boards be treated similar to governmental entities, the alleged defamatory comments involved “public issues” within the meaning of the anti-SLAPP statute. (§ 425.16, subd. (e)(3).)

We reject Damon’s alternate argument the case does not fall within section 425.16 because the “primary purpose” of his lawsuit was to “vindicate the damage done to his reputation” and not to “interfere with and burden the defendant’s exercise of his free speech rights. . . .” We find nothing in the statute requiring the court to engage in an inquiry as to the plaintiffs subjective motivations before it may determine the anti-SLAPP statute is applicable. (See Church of Scientology v. Wollersheim, supra, 42 Cal.App.4th at p. 648, 49 Cal.Rptr.2d 620 [rejecting plaintiff’s argument that “only a direct personal attack on the defendant would be subject to a motion to strike”].) The fact the Legislature expressed a concern in the statute’s preamble with lawsuits brought “primarily” to chill First Amendment rights does not mean that a court may add this concept as a separate requirement in the operative sections of the statute. (See Briggs v. Eden Council for Hope & Opportunity, supra, 19 Cal.4th at p. 1118, 81 Cal. Rptr.2d 471, 969 P.2d 564.)

Damon’s reliance on Foothills Townhome Assn. v. Christiansen, supra, 65 Cal. App.4th 688, 76 Cal.Rptr.2d 516 is misplaced. Damon directs us to the court’s statement that “[w]hen considering a section 425.16 motion, a court must consider the actual objective of the suit and grant the motion if the true goal is to interfere with and burden the defendant’s exercise of his free speech and petition rights.” (Id. at p. 696, 76 Cal.Rptr.2d 516.) This statement must be viewed in the specific factual context in which the case arose, involving a homeowners association’s attempt to collect on an assessment from a homeowner. Because this form of action did not reflect an attempt to “chill” the homeowner’s free speech, the Foothills Townhomecourt found the anti-SLAPP statute inapplicable. (Ibid.) Here, the defamation action certainly had the potential for punishing the defendants for exercising their First Amendment rights, thus serving to “chill” the exercise of their rights and to deter them from speaking freely on topics of public importance.

214*214 II.-III^[*]

DISPOSITION

Judgment affirmed.

KREMER, P.J., and HUFFMAN, J., concur.

[1] Pursuant to California Rules of Court, rule 976.1, this opinion is certified for publication with the exception of Discussion section, parts II and III.

[2] The named defendant homeowner association members were Jack Hess, Rosemarie Treher, Sherry Marsh, Art Rosenberg, James Nihan, and Joe Grant. Nihan and Hess have since died, and their estates have been substituted. The defendant Board members were Ron Terry and Barney Feldman. The private club is the Ocean Hills Journalism Club.

[3] This conclusion renders it unnecessary for us to consider the issue of whether the alleged defamatory statements come under section 425.16, subdivision (e)(1) or (e)(2).

[*] See footnote 1, ante.

Keywords: Anti-SLAPP Motions