BY LANCE KOONCE, LAURA HANDMAN, LISA ZYCHERMAN, AND THOMAS R. BURKE
In 1972, the Sierra Club brought suit in California to temporarily halt logging in a primitive forest to try to prevent despoliation that might have prevented the forest from being considered as a national wilderness area. One of the defendants, timber company Humboldt Fir, asserted state tort counterclaims based on interference with advantageous relationship. The court in Sierra Club v. Butz, 349 F. Supp. 934 (N.D. Cal. 1972), dismissed those claims in light of the First Amendment guarantee of the right to petition the government for redress of grievances, citing New York Times Co. v. Sullivan, 376 U.S. 254 (1964).
The Sierra Club case is considered one of the key precursors to the anti-SLAPP statutes later enacted in many states, which attempt to forestall frivolous claims that merely mask attempts to chill speech. Yet nearly 50 years later, SLAPP lawsuits against environmental protection groups have not vanished, as industry giants continue to try to impede speech by groups criticizing their activities. In a recent twist, another timber company and owner of a major fossil-fuel pipeline have sued Greenpeace under the guise of the RICO statutes.
The first case was brought by Resolute Forest Products Inc., a Canadian global forestry company, against Greenpeace and another environmental advocacy group, in the federal District Court for the Southern District of Georgia, seeking approximately $300 million in damages. The court, on motion by defendants for improper venue, transferred the case to the Northern District of California. Resolute alleged in a voluminous, kitchen-sink complaint that the defendants had made multiple false statements about the impact of the company’s forestry operations on the Canadian boreal forest, indigenous people, woodland caribou, and climate change. The company further argued that defendants targeted Resolute’s customers, costing it millions of dollars, all in support of Greenpeace’s fundraising efforts.
Defamation is not, on its own, a predicate act under the RICO statute. However, Resolute claimed that the same statements that purportedly defamed it were also violations of the mail and wire fraud statutes, arguing that the gravamen of such a claim is dissemination of material misstatements intended to deceive. This novel argument—if accepted—could have put at risk all advocacy groups that work in parallel with others to speak out on public issues, especially given the possibility of treble damages for RICO violations.
Defendants moved to dismiss Resolute’s claims under Rule 12(b)(6), and also to strike the state claims (including defamation) under the California anti-SLAPP statute. On the RICO claims, Greenpeace argued in part that Resolute had not properly pled mail and wire fraud because it had not pled that Greenpeace intentionally participated in a scheme to defraud another of money or property, or that Resolute had relied to its detriment on those alleged misrepresentations. On October 16, 2017, Judge Jon Tigar dismissed Resolute’s claims. Resolute Forest Products, Inc. v. Greenpeace International, 302 F. Supp. 3d 1005 (N.D. Cal. 2017). With respect to Resolute’s RICO claims, the court held that Resolute’s sprawling complaint fell “far short” of Rule 9(b)’s heightened pleading standard; Resolute also could not show proximate cause on its RICO claims; Resolute’s defamation claims were not well-pled because Resolute had failed to plausibly plead that defendants acted with actual malice; and because the First Amendment shielded many of the statements. Also, noting that many of the statements at issue concerned matters of scientific debate, the court concluded “[t]he academy, and not the courthouse, is the appropriate place to resolve scientific disagreements of this kind.”
Resolute filed an amended complaint, and the court again dismissed the bulk of plaintiffs’ claims, including the RICO causes of action. Resolute Forest Products, Inc. v. Greenpeace International, 2019 WL 281370 (N.D. Cal. Jan. 22, 2019). It also held that defendants are entitled to recover their attorneys’ fees on the state law claims under the anti-SLAPP statute. The court allowed only a narrow defamation claim to proceed, based on two statements about logging in a certain area of the Canadian boreal forest, and that case remnant is pending.
In another case against Greenpeace, the operators of the Dakota Access Pipeline—represented by the same law firm that brought the Resolute case—commenced a similar action in federal court in North Dakota, seeking $900 million in damages. In that case, the plaintiff alleged that defendants’ public statements against construction of the pipeline were defamatory, including statements about the company’s alleged failure to consider the concerns of Native Americans, potential environmental concerns relating to the pipeline, and the company’s treatment of protestors. Just as in the Resolute suit, Energy Transfer Partners alleged that defamatory statements can double as fraudulent statements under RICO.
In response to Greenpeace’s motion to dismiss, U.S. District Judge Billy Roy Wilson (sitting by designation) required the plaintiffs to amend their complaint, finding the 187-page pleading “impossible to summarize” and that it not only failed to state plausible RICO claims against Greenpeace, but also “failed to comply with basic rules of pleading.” Judge Wilson went on to note that “[t]his Circuit consistently requires pro se parties to plead with more clarity, and less irrelevant hyperbole, than present here.” Energy Transfer Equity, LP v. Greenpeace International, 2018 WL 4677788 (D. N.D. July 25, 2018).
After the plaintiffs filed an amended complaint, Judge Wilson dismissed the RICO claims with prejudice, explaining that, after “[s]tripping away the hyperbole in the Amended Complaint,” the allegations failed as a matter of law. Energy Transfer Equity, LP v. Greenpeace International, 17-CV-00173-BRW (D. N.D. Feb. 14, 2019). He noted that “[p]osting articles written by people with similar beliefs does not create a RICO enterprise,” and that “[d]onating to people whose cause you support does not create a RICO enterprise.” The court rejected the wire fraud claim, noting “most (if not all) of the alleged false and sensational claims are either subject to debate or matters of opinion or inconsequential.”
Judge Wilson refused to retain jurisdiction over the state law claims, and the pipeline operators have filed an action in North Dakota state court, again alleging defamation, tortious interference, and property rights claims relating to alleged trespass and conversion of the pipeline facilities. That case remains pending. Energy Transfer LP v. Greenpeace International, Case No. 30-2019-CV00180 (N.D. Dist. Ct., Morton Co., Feb. 14, 2019).
These lawsuits are notable because they attempted to convert baseless defamation claims into a purported web of organized, criminal enterprise involving multiple advocacy groups. Indeed, in the pipeline case, the plaintiffs tried to tie Greenpeace and the other defendants to purported violent ecoterrorism, in an ultimately frivolous (but time-consuming and expensive) effort to strengthen its RICO claims.
While so far the results have been encouraging, these cases serve as a reminder that advocates of free speech must remain ever-vigilant in guarding against encroachments by those who wish to use the power of the purse and litigation to stifle their critics.
Lance Koonce is a partner in Davis Wright Tremaine’s New York office. Laura Handman is a partner and Lisa Zycherman counsel in the firm’s Washington, D.C. office. Thomas R. Burke is a partner in the firm’s San Francisco office.