October 24, 2017

Federal Judge Dismisses RICO Lawsuit Against Greenpeace

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By Marjorie Cohn and Jonathan Moore

In an audacious attempt to silence Greenpeace’s constitutionally protected criticism of what the environmental protection group calls “Resolute Forest Destroyer,” the logging company, Resolute Forest Products, sued Greenpeace under RICO – the Racketeer Influenced and Corrupt Organizations Act. In the suit, filed on May 31, 2016, Resolute sought CAD $100 million in economic damages and an injunction against “wrongful activity and disgorgement.” With punitive damages, liability could total $300 million.

On October 16, U.S. District Court Judge Jon S. Tigar dismissed the complaint against Greenpeace and Stand, another environmental protection organization, without prejudice.

“The court’s decision sends a clear message to corporations that attacks on core democratic values like freedom of speech and legitimate advocacy on issues of public interest will not be tolerated,” Greenpeace wrote in a press release.

Besides federal RICO violations, Resolute had alleged state claims against the two groups and their employees and officers for racketeering, defamation, conspiracy, and tortious interference with prospective and contractual business relations. Originally filed in the Southern District of Georgia, the case was transferred to the Northern District of California.

Resolute alleged that Greenpeace targeted the company with media campaigns aimed at cutting Resolute’s profits through false or misleading statements about the company’s impact on the environment and on indigenous communities. According to Resolute, Greenpeace spread false information in order to “fraudulently induce donations” to “pay its leaders and continue raising more funds.” Resolute alleged that Greenpeace published “whopping lie[s] . . . misrepresenting Resolute’s harvesting as a major climate change risk.”

Resolute Tries to Bolster RICO Claims With “Greenpeace Enterprise”

In an attempt to bolster its RICO and racketeering claims, Resolute alleged that Greenpeace agreed to coordinate a “disinformation campaign” and carried it out as a racketeering scheme and a “criminal enterprise.” But, Judge Tigar concluded, Resolute failed to “identify specific acts of racketeering by specific defendants” in its complaint and instead referred to the Defendants collectively as the “Greenpeace Enterprise.”

Judge Tigar also noted that Resolute’s RICO claims are subject to a higher pleading standard because they are based in fraud. See Edwards v. Marin Park, Inc.. Under Rule 9(b) of the Federal Rules of Civil Procedure, plaintiffs alleging fraud claims must “state with particularly the circumstances constituting fraud or mistake,” which means they need to “state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.”

“Resolute fails to meet these heightened pleading requirements,” the judge concluded.

Moreover, he wrote, “Resolute has also failed to show proximate cause as to its RICO claims” because it didn’t explain how it was victimized by the fundraising scheme and there are many reasons a customer might sever its relationship with Resolute.

Resolute’s State Claims

The court had “little difficulty concluding” that the issue of whether Resolute’s use of sustainable forestry practices “is a public controversy generating large scale demonstrations and signed petitions, and that the alleged defamation is related to this public controversy.”

Since Resolute is a limited public figure, the court stated, it was required by law to allege actual malice as an element of its defamation and related state law claims. Thus, Resolute needed to show that the statement was made with knowledge of its falsity or reckless disregard for its truth, and that the statement was materially false.

To demonstrate reckless disregard of the truth, Resolute had to show that the speakers subjectively “entertained serious doubts as to the truth” of their statements. “[G]eneral allegations that a defendant should have known or should have investigated the truth of the statements do not adequately plead actual malice,” the court said, quoting Wynn v. Chanos.

Judge Tigar concluded that Resolute’s complaint failed to “meet its burden of pleading actual malice with the requisite specificity.” Greenpeace corrected maps and statements it had made about whether Resolute had breached the Canadian Boreal Forest Agreement. But the judge drew the “plausible inference” that “Greenpeace made a mistake, not that it acted with malice.”

Since Resolute did not provide “any specific allegations” to “support a finding that [the Defendants] harbored serious subjective doubts as to the validity of [their] assertions,” the court found it appeared “to be a claim that Greenpeace held honestly.”

Thus, the judge determined, “Resolute fails to state a claim for actual malice,” and dismissed the state defamation claim and related state tort claims.

Lawsuit Implicates Environmental Groups’ First Amendment Rights

The court also quoted Films of Distinction Inc. v. Allegro Film Prods, which held that “[u]nder California law, First Amendment limitations are applicable to all claims, of whatever label, whose gravamen is the alleged injurious falsehood of a statement.”

Judge Tigar found that many of Defendants’ publications and statements “appear to be shielded by the First Amendment as statements that are not ‘provable as false,’ or statements that ‘cannot reasonably be interpreted as stating actual facts,'” citing Milkovich v. Lorain Journal Co.

The court also dismissed Resolute’s defamation and related tort claims based on those statements on “the separate and independent ground that the Defendants’ speech constituted the expression of opinion, or ‘different viewpoints that [are] a vital part of our democracy . . . ‘” Partington v. Bugliosi.

“Moreover, many of Greenpeace’s publications at issue rely on scientific research or fact,” the judge concluded. He added that Resolution’s two expert declarations make “more manifest, not less, the degree to which the challenged statements are protected by the First Amendment” since they concern matters of public importance and are subject to professional debate. “The academy, and not the courthouse, is the appropriate place to resolve scientific disagreements of this kind.”

The issues at stake in this lawsuit impact environmental organizations’ rights to exercise their First Amendment rights to freedom of speech and expression.

Anti-SLAPP Also Protects First Amendment Rights

Defendants moved to strike Resolute’s complaint under Georgia’s, or, in the alternative, California’s Strategic Lawsuits Against Public Participation (anti-SLAPP) statute. They contended that Resolute’s lawsuit was “an effort to muzzle protected speech – here, statements about the company’s poor environmental record” and was “brought with the obvious intent to silence” their speech about matters of public importance.

The judge determined that California law applies to the substantive claims under state law and California’s anti-SLAPP statute applies to Defendants’ motions to strike. But the judge didn’t consider Defendants’ anti-SLAPP motions to strike the federal claims.

California law allows for pre-trial dismissal of SLAPP’s that “‘masquerade as ordinary lawsuits’ but are intended to deter ordinary people ‘from exercising their political or legal rights or to punish them for doing so.'” Batzel v. Smith.

Judge Tigar cited the Ninth Circuit’s two-step evaluation requiring (1) that defendant makes a prima facie showing that plaintiff’s lawsuit arises from defendant’s exercise of free speech about a public issue; and 2) that plaintiff establishes a reasonable probability of success on the merits.

Regarding the first prong, Defendants must show that Resolute’s claims are based on a statement made in a public forum in connection with an issue of public interest, or based on conduct that furthered “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.” California courts broadly construe “public interest” to include governmental matters as well as private conduct that impacts a broad segment of society.

Judge Tigar found the first prong was satisfied, concluding that Defendants “were involved in protected activity” because “environmental harm is a matter of public interest for the purposes of anti-SLAPP.”

As for the second prong, the court determined that Resolute had not met its burden of showing a probability of success on its state claims as a matter of law because it had not alleged facts that could show actual malice.

The judge therefore granted Defendants’ motions to strike Plaintiff’s state claims without prejudice. Defendants are entitled to mandatory attorneys’ fees for each state claim under anti-SLAPP.

Plaintiffs have 21 days from October 16 to file an amended complaint.

Free Speech Rights of Environmentalists Vindicated

Greenpeace USA General Counsel Tom Wetterer said, “[w]e are pleased the court unequivocally threw out this attempt to abuse our legal system and silence legitimate criticism on matters of public concern . . . The logging company’s allegations were a clear attempt to silence the voices that advocate for the environment.”

Wetterer added, “These cases don’t seek justice. They intend to silence free speech through expensive, time-consuming litigation. This pattern of harassment by corporate bullies led by Trump’s go-to attorneys must be stopped in its tracks,” referring to Kasowitz Benson Torres LLP, Resolute’s lawyers. Managing partner Marc Kasowitz is Donald Trump’s longtime personal attorney.

Other Pending Lawsuits By Corporations Against Environmental Groups

This is Resolute’s second lawsuit against Greenpeace. In 2013, the company filed a CAD $7 million defamation case against Greenpeace Canada and two staff members. In striking out parts of Resolute’s defamation pleadings in that case, a panel of appellate judges with the Ontario Superior Court ruled that Resolute had attempted to “greatly expand the scope of the litigation and transform the trial into an inquiry into Greenpeace.”

On August 22, 2017, Energy Transfer Partners (ETP), which built the Dakota Access Pipeline (DAP), filed a multi-million RICO lawsuit against Greenpeace, Banktrack and Earth First! in North Dakota. ETP is also represented by the Kasowitz firm. After he was inaugurated, Trump made it a priority to green-light the DAP. “The goal of this suit is to silence opposition by misrepresenting what happened on the ground in Standing Rock – making outrageous and racist claims that big green organizations like Greenpeace orchestrated the Indigenous-led movement at Standing Rock,” Greenpeace said in a statement. “This lawsuit is about silencing opposition in Donald Trump’s America. . . . This suit could have far-reaching consequences for journalists, advocacy organizations, and anyone who values free speech. . . . These suits are part of a pattern of legal bullying, as desperate corporations and political hacks try to silence activists, journalists, and anyone speaking out against injustice.”

The purpose of these lawsuits is to bankrupt leading environmental organizations which have been a thorn in the side of large logging and oil pipeline corporations. They will be stopped only by vigorous litigation combined with massive public protest.

Marjorie Cohn is professor emerita at Thomas Jefferson School of Law and former president of the National Lawyers Guild. Jonathan Moore is a New York attorney who specializes in civil rights and constitutional law. He is also an adjunct faculty member of the City University of New York School of Law.

This article first appeared on JURIST.