Appeal from the United States District Court for the Central District of California D.C. No. 2:08-cv-03936-RGK-FFM R. Gary Klausner, District Judge, Presiding.
The opinion of the court was delivered by: Schroeder, Circuit Judge
Argued and Submitted February 2, 2010 -- Pasadena, California
Before: Mary M. Schroeder, Raymond C. Fisher and N. Randy Smith, Circuit Judges.
Journalists and publishers risk a defamation action when they put words in a public figure's mouth. The New Yorker magazine learned this to its chagrin in Masson v. New Yorker Magazine, Inc., 501 U.S. 496 (1991). The issue in this case is whether there are similar risks when a network television program broadcasts a statement actually made by a public figure, but presents the statement in a misleading context, thereby changing the viewer's understanding of the speaker's words.
The plaintiff public figure in this case is Dr. Frederick Price, a minister known for his television evangelism. Defendants are American Broadcasting Companies, Inc. ("ABC") and others involved in the production of the news program "20/20," including correspondent John Stossel, producer Glenn Ruppel, and televangelist critics Ole Anthony and Trinity Foundation, Inc., who allegedly provided the original footage of Price to the network. The primary statement in question comes from a film clip ("the Clip") of Price delivering a sermon, in which Price says: "I live in a 25-room mansion. I have my own $6 million yacht. I have my own private jet, and I have my own helicopter, and I have seven luxury automobiles." ABC broadcast the Clip suggesting that Price was boasting about his own wealth, which is substantial. In fact, however, the Clip was excerpted from part of a longer sermon in which Price was speaking from the perspective of a hypothetical person who, though wealthy, was spiritually unfulfilled. After ABC broadcast a retraction acknowledging the mistake, this lawsuit ensued.
The district court dismissed Price's defamation action as frivolous under California's anti-Strategic Lawsuit Against Public Participation ("anti-SLAPP") statute, California Code of Civil Procedure § 425.16(b)(1), which provides for early dismissal of suits that threaten defendants' right of expression under the First Amendment. The district court concluded that Price could not prove that Defendants' broadcast of the Clip was "false" within the meaning of defamation law, because the plaintiff had elsewhere made similar statements about his own wealth.
We conclude, for the reasons explained more fully below, that the district court's dismissal of the suit under the anti-SLAPP statute was premature. The district court erroneously compared the statements in the Clip with Price's actual wealth and possessions, agreeing with Defendants that the Clip was "substantially true." Under Masson, however, when dealing with material that is portrayed as a quotation, we are to compare the quotation as published with the words the speaker actually said. See 501 U.S. at 502. Where the published quotation contains a material alteration of the meaning conveyed by the speaker, the published quotation is false. Id. at 517. Here, the context in which Price's words were presented materially changed the words' meaning. Because Price has a reasonable possibility of proving that the Clip, as broadcast, was false, and because Defendants relied exclusively on the issue of non-falsity in their motion to dismiss under the anti-SLAPP statute, we must reverse the dismissal of the express defamation claim and remand. We express no opinion as to whether Price can satisfy the remaining elements of a defamation claim or whether there were any damages. We affirm the district court's dismissal of Price's implied defamation claims.
In 1973, Price founded the Crenshaw Christian Center/Ever Increasing Faith Ministry ("the Church"), which presently claims a congregation of over 22,000 members. For decades, Price has televised his sermons through his "Ever Increasing Faith" television programs. Price preaches a theology known as the "prosperity gospel," which emphasizes God's generosity, particularly financial generosity, and the ability of believers to claim that generosity for themselves.
As a self-proclaimed "prophet of prosperity," Price touts his own prosperity in his preaching, books, audio recordings, and public statements. Price is indeed wealthy. The undisputed evidence establishes that Price owns an 8,000 square foot house worth $4.6 million, travels around the world in a private Gulfstream jet owned by the Church, owns a Rolls Royce, wears an $8,500 watch, and serves as Chief Executive Officer of the Church, which Price describes as a $40 million corporation.
On March 23, 2007, ABC broadcast a program entitled "Enough" on its news show "20/20." The program, hosted by ABC news correspondent John Stossel, featured seven individuals who had taken personal, moral stances on a variety of topics, including children's behavior in restaurants, the price of basketball shoes, politicians' practice of naming buildings after themselves, children born out of wedlock, earmarks for local interests, and treatment of animals by law enforcement. The portion of the program at issue in this case was a report on wealthy preachers, as investigated by a non-profit watch-dog group dedicated to improving the transparency and accountability of Christian ministries. ABC promoted the report using teasers and a mini-report on "Good Morning America," which included excerpts of the full-length report as well as silent footage from the Clip of Price's sermon, with voice-overs by news presenters pitching the report. It is the contents of the report, mini-report, and teasers that give rise to Price's defamation action.
The following is a narrative of the seven-minute report, drawn largely from the district court's description. The Clip at issue is emphasized:
The report begins with a question posed by Stossel: "They preach the gospel of giving to God. But how much of what you give do they keep for themselves? Is it time for someone to say 'enough'?" Stossel then states, "[m]aybe they will do great things with your money." Subsequently, the report shows audiovisual clips of several ministers, not including Price.
The report then turns to a brief interview with a member of Price's congregation, who states that she believes her "money is being put to excellent use, without one question." Stossel continues, "[a]nd yet her pastor, Fred Price, boasts that . . . [cutting to an audio-visual clip of Plaintiff]: 'I live in a 25-room mansion. I have my own $6 million yacht. I have my own private jet, and I have my own helicopter, and I have seven luxury automobiles.' " Stossel states, "At least he tells people about it, but many preachers don't advertise how well they live." The report then runs video clips of other ministers who are identified as less forthcoming about their wealth. Stossel explains that some of these other ministers "point out that they comply with all IRS regulations." The report then turns to the featured guest, who states that complying with all IRS regulations is "not good enough."
The featured guest, Rusty Leonard, is the founder of Ministry Watch, an organization created to improve fiscal transparency of ministries and charities. Stossel presents him as "a deeply religious man who invests and lectures about investing in companies that he believes have Christian-friendly values." Stossel reports that Leonard left a lucrative Wall Street career "because he thought it was un-Christian [for ministers, including Price to] ask donors for money but [not] reveal how they spend it." During Stossel's voiceover, images of 10 different ministers flash across the screen. Price's image appears for approximately one second. Stossel then states, "[Leonard] says donors are being hosed." The report then cuts to Stossel interviewing Leonard. Stossel asks Leonard about how he knows donors are being hosed. Leonard states, "You're being hosed if you don't know."
Turning to a clip of a Ministry Watch employee, the report shows how Ministry Watch asks ministries to reveal their finances. A Ministry Watch employee is shown making a call in an office: "We sent you a letter a couple of weeks ago requesting your organization's latest 990," she says. Stossel explains, "They ask Christian ministries and charities to reveal their finances." Stossel asks Leonard: "So you call up and say, 'Hi, I'd like to know where your money's going,' and they say, 'Go to Hell'?" Leonard laughs and answers, "Essentially. Especially the bad guys, right? Nobody had ever held them to account from an independent perspective, right? So they were totally freaked out by it." Stossel then remarks how some of the people have threatened to sue Leonard, to which Leonard responds: "Bring it on," and explains that all he gets are threats, not real lawsuits. Stossel then explains that "[w]hile most charities legally must report their finances, ministries are exempt."
Stossel reports that Ministry Watch has criticized approximately 28 religious groups for not revealing how they spend donations. At this point, an image of Ministry Watch's "Transparency List" flashes on the screen for approximately five seconds, showing the names of approximately 11 ministries, including Price's "Ever Increasing Faith" television ministry. Stossel then identifies specific ministers, not including Price, as televangelists whom Ministry Watch has criticized for being secretive and having little or no financial transparency. Leonard states that people should not donate to such ministries because they are not open about how they spend donations. Leonard also ...