Judge: Armen Tamzarian, Case: 24STCV01166, Date: 2024-05-03 Tentative Ruling

Case Number: 24STCV01166    Hearing Date: May 3, 2024    Dept: 52

Tentative Ruling:

            Defendants Lynx Dx, Inc. and Jeremiah Johnson’s Demurrer and Motion to Strike Portions of Complaint

Demurrer

Defendants Lynx Dx, Inc. (Lynx) and Jeremiah Johnson demur to plaintiff Eunice Ko’s eighth cause of action for defamation.  “The tort of defamation ‘involves (a) a publication that is (b) false, (c) defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure or that causes special damage.’ ”  (Taus v. Loftus (2007) 40 Cal.4th 683, 720.)

A. The Statements

Plaintiff sufficiently alleges the substance of the defamatory statements.  To allege defamation, the complaint “must set forth ‘either the specific words or the substance of’ the allegedly defamatory statements.”  (Comstock v. Aber (2012) 212 Cal.App.4th 931, 948.)  “As Witkin distills the pleading rule, ‘It is sometimes said to be a requirement, and it certainly is the common practice, to plead the exact words or the picture or other defamatory matter.  The chief reason appears to be that the court must determine, as a question of law, whether the defamatory matter is on its face or capable of the defamatory meaning attributed to it by the innuendo.  Hence, the complaint should set the matter out verbatim, either in the body or as an attached exhibit.’ ”  (Ibid.)

Plaintiff’s complaint alleges Lynx and Johnson published statements “directly or by inference, that Plaintiff was incompetent, unreliable, a poor performer, manipulated or falsified test results.”  (Comp., ¶ 124.)  She alleges these statements are false.  (Id., ¶¶ 123, 125.) 

The allegedly false statement that plaintiff “manipulated or falsified test results” is defamatory either on its face or based on the context alleged in the complaint.  Plaintiff worked for Lynx, “a corporation that provides diagnostic solutions for informed prostate cancer risk screening that can be implemented in a clinical setting.”  (Comp., ¶ 3.)  Lynx “planned to do” a “clinical trial” of a test to detect prostate cancer.  (Id., ¶ 15.)  When speaking about an employee at a company that develops cancer screening tests, falsely claiming she manipulated or falsified test results is clearly defamatory. 

            B. Publication

            Defendants argue the complaint does not adequately identify the people to whom they allegedly published the statements.  Plaintiff alleges she “is informed and believes that” defendants made the defamatory statements “to others within Defendants’ organization, as well as attorneys, consultants, contractors, vendors, prospective employers, and others outside the business.”  (Comp., ¶ 124.)  Under the liberal standard of pleading, these allegations suffice. 

The California Supreme Court rejected an argument like defendants’ in Okun v. Superior Court (1981) 29 Cal.3d 442.  There, the complaint alleged defendants “made the Slanderous Statement to members of the Beverly Hills community.”  (Id. at p. 458.)  The Court stated, “Defendants contend the allegation of slander is fatally inexact as to time and place of utterance and persons addressed.  Yet the pleading does seem certain enough in those respects.  Less particularity is required when it appears that defendant has superior knowledge of the facts, so long as the pleading gives notice of the issues sufficient to enable preparation of a defense.”  (Ibid.) 

As in Okun, the defendants who allegedly made the defamatory statements necessarily have superior knowledge of to whom they spoke.  And plaintiff’s description of the people to whom defendants published the statements is no less specific than “members of the Beverly Hills community.”    

Defendants cite Dible v. Haight Ashbury Free Clinics, Inc. (2009) 170 Cal.App.4th 843, 853-54 (Dible) for the proposition that “a plaintiff must specifically allege the defamatory statement was published to a third party and identify the individual or entity to whom the statement was made.”  (Memo., p. 10.)  Dible does not require specifically identifying the individual or entity who heard the statement.  There, the court reviewed an order granting defendant’s anti-SLAPP motion.  The plaintiff alleged two categories of defamatory statements.  The first was made to the Employment Development Department, which the court held had no probability of prevailing because of plaintiff’s “inability to establish that any damage occurred.”  (Dible, supra, 170 Cal.App.4th at p. 853.)  The second category of statements was made directly to the plaintiff.  (Ibid.)  Plaintiff showed no probability of prevailing as to those statements because (a) there was “no evidence of the presence of a third person” and (b) the court rejected the “rule of compulsory self-publication” because of “the lack of any republication.”  (Id. at p. 854.) 

The plaintiff in Dible thus did specifically identify the people to whom the statements were made: the Employment Development Department and plaintiff herself.  Her defamation claim failed for other reasons.

Plaintiff’s complaint also invokes the doctrine of compelled self-publication.  (Comp., ¶ 127.)  Defendants argue plaintiff fails to allege sufficient facts to do so.  Because plaintiff adequately alleges defendants published the statements to third parties, the court need not and does not reach this issue.

C. Common Interest Privilege

Defendants contend the common interest privilege precludes plaintiff’s claim for defamation.  “Civil Code section 47 provides in pertinent part that a publication or broadcast is privileged if made: ‘(c) In a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information.’ ”  (McGrory v. Applied Signal Technology, Inc. (2013) 212 Cal.App.4th 1510, 1538.)  This privilege “has been determined to apply to statements by management and coworkers to other coworkers explaining why an employer disciplined an employee.”  (Ibid.)  It also applies when “a former employer… respond[s] to an inquiry from a potential employer concerning an individual’s fitness for employment” and acts without malice.  (Neal v. Gatlin (1973) 35 Cal.App.3d 871, 877.)

Any defect in the complaint based on this privilege is not clear from the face of the pleading.  Plaintiff alleges defendants made the defamatory statements “to others within Defendants’ organization, as well as attorneys, consultants, contractors, vendors, prospective employers, and others outside the business.”  (Comp., ¶ 124.)  Those “within Defendants’ organization” and “prospective employers” may fall within the common interest privilege, but the court cannot reach that conclusion as to “attorneys, consultants, contractors, vendors, … and others outside the business.”  The complaint does not allege facts suggesting all those people shared a common interest with defendants or requested the information from defendants.

Moreover, plaintiff alleges defendants made the statements maliciously.  The privilege only applies to “a communication, without malice.”  (Civ. Code, § 47(c).)  The complaint alleges defendants knew the statements “to be false” or made them “with reckless disregard for their probable falsity.”  (Comp., ¶ 125.)  On demurrer, the court must accept that factual allegation as true.  Defendants rely on cases decided based on evidence.  (McGrory v. Applied Signal Technology, Inc., supra, 212 Cal.App.4th at p. 1540 [no “triable issue of malice” on summary judgment]; King v. United Parcel Service, Inc. (2007) 152 Cal.App.4th 426, 442 [summary judgment proper because plaintiff “has not unveiled the quantum of evidence necessary to create a triable issue” on “malice”]; Deaile v. General Telephone Co. of California (1974) 40 Cal.App.3d 841, 848 [appeal after jury trial].)

D. Opinion or Fact

Finally, defendants argue plaintiff only alleges statements of opinion, not fact.  “A statement of opinion ‘cannot be false and is outside the meaning of’ ” defamation.  (Jensen v. Hewlett-Packard Co. (1993) 14 Cal.App.4th 958, 970.)  Plaintiff alleges defendants falsely told others she “manipulated or falsified test results.”  (Comp., ¶ 124.)  Assuming the truth of the complaint’s allegations, that statement is “a provably false assertion of fact” because it “either happened or it did not.”  (Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 728.)

The other defamatory statements that “Plaintiff was incompetent, unreliable, [and] a poor performer” (Comp., ¶ 124) may not be actionable.  But “[a] demurrer must dispose of an entire cause of action to be sustained.”  (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.)  Because plaintiff alleges at least one defamatory statement of fact, the court must overrule the demurrer.

Motion to Strike

Defendants Lynx and Johnson move to strike numerous portions of the complaint regarding punitive damages.  Courts may strike allegations related to punitive damages where the facts alleged “do not rise to the level of malice, oppression or fraud necessary” to recover punitive damages under Civil Code section 3294.  (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 64.)  Conclusory allegations are not enough.  (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)  The complaint must make “factual assertions supporting a conclusion [defendants] acted with oppression, fraud or malice.”  (Ibid.)

Plaintiff alleges sufficient facts to recover punitive damages.  “[W]illfully and consciously retaliat[ing] against” employees for exercising their rights can constitute malicious or oppressive conduct sufficient for punitive damages.  (Colucci v. T-Mobile USA, Inc. (2020) 48 Cal.App.5th 442, 455.)  That an employer “intentionally discriminated against” an employee can suffice for malice.  (Cloud v. Casey (1999) 76 Cal.App.4th 895, 911.) 

Plaintiff’s complaint alleges defendants terminated her “based on her gender/sex, in retaliation for Plaintiff’s complaints about discrimination and harassment, and for protesting against what she perceived as a hostile work environment.”  (¶ 38.)  It further alleges defendants terminated her because she “raised concerns over illegal activity or practices pertaining to solicitation of business and sales in the healthcare area” and “was terminated for her efforts to follow” laws “pertaining to kickbacks and inducement of healthcare professionals.”  (¶ 39.)  At this stage, these allegations suffice for punitive damages.  Whether the alleged conduct rises to the level of malice, oppression, or fraud is a question of fact.

Disposition

Defendants Lynx Dx, Inc. and Jeremiah Johnson’s demurrer to plaintiff Eunice Ko’s eighth cause of action is overruled. 

Defendants’ motion to strike portions of the complaint is denied.

Defendants Lynx Dx, Inc. and Jeremiah Johnson shall answer within 20 days.