Nygård, Inc. v. Kustannusosakeyhtiö Iltalehti, B192639 (Cal. App. 6/21/2007), B192639

• Court: California Court of Appeals
• Writing for the Court: Turner
• Decision Date: 21 June 2007
• Parties: NYGÅRD, INC. et al., Plaintiffs and Respondents, v. KUSTANNUSOSAKEYHTIÖ ILTALEHTI et al., Defendants and Appellants.
• Docket Number: B192639

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NYGÅRD, INC. et al., Plaintiffs and Respondents,
v.
KUSTANNUSOSAKEYHTIÖ ILTALEHTI et al., Defendants and Appellants. B192639 Court of Appeals of California, Second Appellate District, Division Five June 21, 2007 NOT TO BE PUBLISHED

Appeal from an order of the Superior Court of Los Angeles County, No. BC342352, Irving S. Feffer, Judge. Reversed with directions.

Carlsmith Ball LLP, Malcolm S. McNeil, Ole R. Sandberg and Emily E. Brown for Defendants and Appellants.

Seyfarth Shaw LLP, Todd C. Hunt and Daniel Hargis for Plaintiffs and Respondents.

TURNER, P. J.

I. INTRODUCTION

This defamation action arises from a Finnish newspaper's coverage of a press conference. The press conference was held at the Four Seasons Hotel near Beverly Hills in connection with the release of a motion picture, Into the Blue (Columbia TriStar 2005). The movie was filmed in the Bahamas. The newspaper and on-line articles contained statements about and suggestions of sexual conduct occurring at parties and publicity events attended by the film's stars and crew. These events were held at the Bahamian residence of an internationally known clothing manufacturer and publisher—a "fashion celebrity." The Bahamian property is recognized as one of the most beautiful and unique homes in the world. It has been featured on television programs including "Life of Luxury." The trial court denied defendants' motion to strike the complaint pursuant to Code of Civil Procedure¹ section 425.16. The trial court found plaintiffs' defamation claim did not arise from an act in furtherance of defendants' constitutional free speech right in connection with a public issue. We reverse the order. We conclude a newspaper's coverage of a press conference concerning the movie industry and sexual conduct within the confines of a renowned Bahamian residence owned by a fashion industry magnate was "any act . . . in furtherance of [defendants'] right of . . . free speech under the United States or California Constitution in connection with a public issue" within the meaning of section 425.16, subdivision (b)(1). We further find plaintiffs failed to establish a probability of prevailing on the merits in that they failed to present any evidence defendants acted with actual malice. We direct the trial court to enter an order granting defendants' special motion and striking the complaint. In addition, on remand, defendants are entitled to recover their attorney's fees and costs, including those incurred on appeal.

II. BACKGROUND A. The Complaint

Plaintiffs are Nygård, Inc., Nygård International Partnership, and Peter Nygård. Defendants are Alma Media Corporation, a Finnish corporation with its principal place of business in Helsinki, Kustannusosakeyhtiö Iltalehti (Iltalehti), a Finnish newspaper, and Kirpi Uimonen, an Iltalehti reporter. Alma Media Corporation publishes Iltalehti. Alma Media Corporation is not a party to this appeal.

Plaintiffs allege that on September 24, 2005, an article was published in Iltalehti, "a tabloid magazine," that made defamatory statements about them. An abbreviated version of the article was also published on Iltalehti's Internet Web site. The articles referred to events plaintiffs hosted at their property in Nygård Cay, Bahamas. The Bahamian property includes Mr. Nygård's residence and Nygård entities' corporate offices. The articles included disparaging statements as follows: "Quoted a celebrity in Finnish as calling Plaintiffs' resort property in Nygård Cay, Bahamas `dirty/tainted'"; "Stated in Finnish that, `Hollywood Stars were disgusted/shocked: Sex party at Nygård's home'"; "Referred in Finnish to an event at Plaintiffs' resort property in Nygård Cay, Bahamas as a `Perverse Party' and published (in Finnish) that `Hollywood stars were disgusted/shocked when visiting Peter Nygård's home'"; "Quoted a celebrity in Finnish as stating, `On the weekends, Nygård would host parties that began with sports, massaging, manicures [and] pedicures . . . then things got wild. It's encouraged for everyone to behave "wildly." Young women attend the Sunday party, they get naked and some have sex in the hot tubs with everyone watching. It was scary/disgusting.'"; "Quoted a celebrity in Finnish as stating, `Nygård's home during that time became "party central." He is a 60-something man who lives in his "own world" in a tropical paradise. The place is fun, but at the same time unbelievably tasteless'"; and "Quoted a celebrity in Finnish as stating, `Even though the activities were "disturbing," I spent a lot of time there—the place is like Disney World, in a weird way." These false statements, published with actual malice, caused damage to plaintiffs' business and reputation.

An English translation of the September 24, 2005 Iltalehti newspaper article was attached as an exhibit to the complaint. The article reported, among other things, that Mr. Nygård, a millionaire, had entertained movie stars and a film crew at his "Bahamas villa" while the movie Into the Blue was being filmed on the islands. Among the actors who were entertained at Mr. Nygård's villa were Jessica Alba, Paul Walker, and Ashley Scott. The article stated, "People were encouraged to behave in a crazy way. In the parties on Sundays there are young women that get undressed and may have sex in the Jacuzzi where anybody can see them." The film's director, John Stockwell, was reported to have said, "[T]he Nygård house became the crew's party center" during the four months they were working in the Bahamas. Mr. Stockwell is apparently quoted as also saying: "[Mr. Nygård] is in his early sixties, a man who lives in his own never-never land in a tropical paradise. The place is a lot of fun, but at the same time in unbelievably bad taste. I could not live that way myself. [¶] . . . `[S]trange things were happening' when the local girls came to the party." Additionally, the article stated: "Paul Walker[,] known for his films The Fast and the Furious[,] enjoyed being Nygård's guest, but he, too, considers the parties eccentric. [¶] . . . The place was like Disneyland, in a crazy way."

B. The Special Motion To Strike 1. Defendants' Evidence

Defendants moved to strike the complaint pursuant to section 425.16. Defendants presented evidence Mr. Nygård was "a longstanding entertainment and fashion celebrity known throughout North America" and "an internationally prominent public figure" with "extensive entertainment industry contacts." Mr. Nygård was: "Chairman of Canada's largest women'[s] clothing and fashion manufacturing company"; the owner of N Magazine, "a fashion magazine which is distributed throughout California and North America"; and the "founder of the internationally-known charity, The Nygård Endowment Fund." Further, according to a complaint filed by plaintiffs in another defamation lawsuit on August 11, 1999, "[Mr.] Nygård, Nygård, Inc., and Nygård International [Partnership] are indistinguishable from each other as Nygård has been for many years a public figure throughout North America . . . ." According to Ken Grondin, the chief financial officer of Nygård, Inc. and Nygård International Partnership, these entities: "manufacture and distribute women's fashion clothing throughout the world"; "conduct a substantial amount of business in the United States and California, and maintain several offices, warehouses, and distribution centers in California." Additionally, according to Mr. Grondin, Nygård, Inc. and Nygård International Partnership "operate several warehouses in Gardena, California" which distribute clothing and related products throughout the United States. In addition, Mr. Grondin stated the Nygård companies also maintain offices and other facilities in Gardena and Marina del Rey. In 2005, the California facilities handled approximately 60 percent of all Nygård products that were shipped in the United States. Mr. Grondin declared: "The Nygård Cay on-location movie filming in 2005 described in the [Iltalehti] article was hosted by the Nygård Companies for public relations purposes. Although the event occurred at a facility which includes Mr. Nygård's Bahamas residence, the event was also held on behalf of the Nygård Companies, which maintain offices at this location."

Ms. Uimonen, who authored the article in question, declared that the information in the article resulted from interview sessions involving five reporters at the Four Seasons Hotel near Beverly Hills. The sessions were arranged by the film's distributor. The persons interviewed included actors, Ms. Alba, Ms. Scott, and Mr. Walker, and the director, Mr. Stockwell. The article was published one or two weeks before the film Into the Blue was released in the United States and two months before it was released in Finland.

Defendants presented further evidence that at the time they published the articles in question: they did not doubt the veracity of the statements therein; no one had provided a contradictory version of the events described; and all interviewed individuals' accounts were consistent. Ms. Uimonen, the reporter, declared: "The statements contained in the Articles were based on statements made to me in interviews I conducted with the persons quoted therein. I have never doubted the veracity of the statements made in the Articles. None of the individuals I interviewed provided statements that contradicted the version of events described in the Articles. To the contrary, all the individuals I interviewed provided accounts that were consistent with the accounts of the other individuals I interviewed."

2. Plaintiffs' evidence

Plaintiffs opposed the motion. Plaintiffs argued: defendants did not meet their initial burden as the article describes private events, not a public issue; there was a strong probability plaintiffs would prevail as percipient witnesses denied any sexual conduct at the parties in question; because discovery was stayed under subdivision (g) of section 425.16, the...