Ex-Employee’s Anti-Bank Rants Are Free Speech

A disgruntled former bank vice president’s Craigslist rants  about his employer and its CEO are protected free speech, invalidating claims he defamed the bank, a California appeals court says.  In the process, the First District Court of Appeal took down a century-old state law that made it a crime to spread nasty rumors about the financial condition of a bank.

Robert Rogers, a former vice president and chief credit administrator at Oakland’s Summit Bank, posted 21 anonymous screeds about the bank over two months in 2008 in the “rants and raves” section of Craigslist.

Among his attacks, Rogers wrote, “Whats [sic] up at this problem Bank.  The CEO provides a [sic] executive position to her worthless, lazy fat ass son Steve Nelson.  This should not be allowed.  Move your account now.”

And later, he said, “This is a piss poor Bank.  I would suggest that anyone that banks at Summit Bank leave before they close.”

Summit discovered Rogers was the ranter after seeking Craigslist’s records.  Rogers admitted it, but argued that there were no lies in his posts, only true facts and his personal opinions. The bank sued him for libel, saying his posts intended to tarnish the bank’s “good name and reputation.”

Rogers asked the trial judge to throw out the suit as an improper effort to silence him under California’s anti-SLAPP law, an acronym for strategic lawsuit against public participation.

The bank argued that the anti-SLAPP law did not apply. Rogers’ posted statements constituted unprotected speech because “making false claims against a bank is criminal.” It cited a 1917 law that makes it criminal to circulate statements or rumors that are untrue and may affect the solvency or financial standing of the bank.

A century ago, bankers lobbied Congress to make dissemination of rumors about a bank’s financial status criminal libel, after statements during the Bank Panic of 1907-1908 ignited runs on banks,  according to Justice Ignazio J. Ruvolo.

But under modern constitutional law, the broad provisions of that law “impermissibly sweep within their proscriptions speech that cannot be criminally punished,” Ruvolo wrote.

The state law criminalizing libel of banks is unconstitutional on its face because it does not contain a clear requirement of actual malice on the part of the speaker, Ruvolo wrote.  The law is also too vague to let the public know what would be illegal rumor mongering.

“In light of the recent financial meltdown of some of our country’s largest and most trusted financial institutions, the financial stability of our banking system is a legitimate object of constitutionally protected public commentary, discussion, criticism, and opinion,” he said.

The California Bankers’ Association weighed in on Summit’s behalf, arguing that the growing number of insolvent banks today should make us solicitous of preventing derogatory statements that might hurt a bank’s standing.

Again, Ruvolo disagreed.

“It is precisely because of the current financial climate that we believe the public should be given broad latitude to express a wide range of viewpoints on matters relating to the operation and solvency of our financial institutions,” he wrote.

Ruvolo ordered Alameda County Superior Court Judge Frank Roesch to throw out the lawsuit and ordered Summit to pay Rogers’ legal fees.

Justices Timothy A. Reardon and Patricia K. Sepulveda joined Ruvolo’s opinion.

Case: Summit Bank v. Rogers, Case No. A129800


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