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CoreCivic Fails to Defeat California’s Anti-SLAPP Law at Ninth Circuit, Must Pay $45,630 in Attorney Fees

In November 2022 the federal court for the Northern District of California shot down a suit by private prison giant CoreCivic which sought to weaponize anti-defamation law against one of the company’s more vocal critics.

As previously reported by PLN, CoreCivic took exception to remarks made by Morgan Simon in three articles she published in Forbes and sued her for defamation. [See: PLN, Sep. 2021, p.56.] In the articles, Simon said CoreCivic managed immigration detention centers “that have been at the heart of the controversy over the separation of families and incarceration of individuals for crossing the U.S. border.” She further wrote the company had “a long history of profiting from mass incarceration: they make money when beds are filled, justly or unjustly, which is why they’ve spent $25 M[illion] on lobbying over the past three decades to push for harsher criminal justice and immigration laws.”

CoreCivic shot back that it didn’t house any immigrant children separated from their parents. Simon updated two articles to include clarifications, but CoreCivic filed suit in March 2020 anyway, claiming she had intentionally made statements that were “demonstrably false.” In addition to Simon, it sued the company she co-founded, Candide Group LLC, an investment advisory firm based in Oakland, California, which is a member of the Families Belong Together coalition advocating against private prisons.

Candide filed a motion to strike the complaint under California’s anti-SLAPP (Strategic Lawsuits Against Public Participation) Act, which was passed to protect critics from litigation intended to deter their constitutionally protected free speech. At a hearing on the motion, CoreCivic’s attorneys essentially admitted that the company did, in fact, house immigrant parents separated from their children – “the other half of the afflicted families,” as the district court wrote. But since Simon never said the company held children separated from their parents, only that it was part of the “separation of families,” her comments were “true enough under the First Amendment and under California defamation law,” the Court said. Accordingly, CoreCivic’s suit was dismissed.

The company appealed, but the U.S. Court of Appeals for the Ninth Circuit affirmed that decision on August 30, 2022. CoreCivic argued that Candide’s special motion to strike under the state anti-SLAPP law could not be heard in federal court. The Ninth Circuit disagreed, finding that circuit precedent, including after a U.S. Supreme Court decision that the company relied upon, had “routinely applied the California anti-SLAPP statute in federal court.”

CoreCivic also cited out-of-circuit decisions that the Ninth Circuit said were not binding on it and did not change its view that the company’s arguments were without merit. Nor did CoreCivic adequately show that Simon’s comments constituted defamation, since she never said the private prison operator held children separated from their parents and didn’t imply that it did. However, since the district court did not address CoreCivic’s claims related to its lobbying practices, they were remanded for further proceedings. Circuit Judge Carlos T. Bea entered a dissenting opinion only as to CoreCivic’s implied defamation claim. The full Ninth Circuit then declined to rehear the case en banc on October 20, 2022. See: CoreCivic, Inc. v. Candide Grp., LLC, 46 F.4th 1136 (9th Cir. 2022); and 2022 U.S. App. LEXIS 29257 (9th Cir.).

On remand the district court held on November 8, 2022, that Simon’s comments regarding the company’s lobbying were presented as opinion, not fact – e.g., she stated in one article that “it’s been speculated and critiqued” that private prison companies have lobbied for “harsher” criminal justice and immigration laws. As Simon was expressing her opinion rather than presenting it as fact, CoreCivic’s defamation claim as to its lobbying practices failed.

The district court ordered CoreCivic to pay $45,630 in attorney fees to Simon and her firm, as they were the prevailing parties. They were ably represented by attorneys from the San Francisco, Los Angeles and New York City offices of Davis Wright Tremaine, LLP. See: CoreCivic, Inc. v. Candide Grp., LLC, 2022 U.S. Dist. LEXIS 203654 (N.D. Cal.).

As noted by the National Law Review, the Ninth Circuit’s decision sets up a split with other federal circuits, so the U.S. Supreme Court may “break its longstanding silence on whether and to what extent state anti-SLAPP laws are preempted” by federal laws.  

Additional source: National Law Review