FILED
Jul 05 2017, 8:21 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES
Daniel D. Bobilya John J. Thar
Conor S. Slocum Dustin J. Moloy
Bonahoom & Bobilya, LLC Katzman & Katzman, P.C.
Fort Wayne, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
401 Public Safety and Lifeline July 5, 2017
Data Centers, LLC, Court of Appeals Case No.
Appellants-Defendant, 49A02-1609-PL-2132
Appeal from the Marion Superior
v. Court
The Honorable John F. Hanley,
David Ray and the Committee to Judge
Elect David Ray, Trial Court Cause No.
Appellees-Plaintiff 49D11-1511-PL-37914
Baker, Judge.
Court of Appeals of Indiana | Opinion 49A02-1609-PL-2132 | July 5, 2017 Page 1 of 16
[1] 401 Public Safety (401) and Lifeline Data Centers, LLC (Lifeline) (collectively,
the Appellants), appeal the trial court’s order dismissing their defamation
complaint against David Ray and the Committee to Elect David Ray (the
Committee) (collectively, the Appellees) based on the Anti-SLAPP Statute.1
Finding no error, we affirm.
Facts 2
[2] 401 is an Indiana limited liability company that owns a portion of what used to
be the Eastgate Mall, located on North Shadeland Avenue in Indianapolis (the
Property). Lifeline is an Indiana limited liability company that leases a portion
of the Property. Alex Carroll is the managing member of both 401 and Lifeline;
it is unclear whether Carroll also has an ownership interest in the companies.
Carroll, through Lifeline, supported the campaign of Ben Hunter, who was the
incumbent City-County Councilman running against Ray.
[3] In 2010 and 2013, Lifeline made political contributions of $800 and $500,
respectively, to Hunter’s campaign committee; at that time, Hunter was a
member of the Indianapolis City-County Council. On May 20, 2011, 401
entered into a twenty-five-year lease agreement (the Lease) with the City of
Indianapolis (the City), pursuant to which 401 leased a portion of the Property
to the City. Hunter strongly advocated in favor of the Lease. The portion
1
Ind. Code ch. 34-7-7 et seq. SLAPP is an acronym for Strategic Lawsuits Against Public Participation.
2
We held oral argument in Indianapolis on April 27, 2017. We thank counsel for their able written and oral
presentations.
Court of Appeals of Indiana | Opinion 49A02-1609-PL-2132 | July 5, 2017 Page 2 of 16
leased by the City is commonly referred to as the “Regional Operations Center”
(ROC).
[4] Beginning in September 2013, the Indianapolis media began investigating and
reporting about the physical state of the property that housed the ROC.
Specifically, there were media reports that the building was unfit and unsafe for
people to work in. In 2014, media reports indicated an ongoing City-County
Council investigation into the Lease, which was described as a bad deal for the
City and its taxpayers. Carroll admitted to receiving notices of violation from
the City.
[5] Ray is a lifelong resident of the east side of Indianapolis. In 2015, Ray ran as a
candidate for the office of the 19th District of the Indianapolis City-County
Council. The Committee was established to assist with Ray’s campaign, and
Ray served as the Committee’s chairperson.
[6] Tim Henderson volunteered as a general consultant for Ray’s campaign.
Henderson conceptualized a series of flyers to be mailed to eastside
constituents. The third flyer (the Flyer), which is the subject of this litigation,
can be described as follows:
• The first side contains reproductions of two reports of the 2010 and 2013
contributions made by Lifeline to Hunter’s campaign committee.
• That side states, “What will $1,300 from a political insider buy? A
contract with the City. A contract Ben Hunter pushed for. On
November 3rd vote NO to sweetheart deals for political insiders.”
• Additionally, that side includes two media quotations. First, from FOX-
59 on September 12, 2013, “Contract for ROC locks city into 25-year
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deal.” Second, from the Indianapolis Star on September 13, 2013, “The
[ROC] is in Hunter’s district, and Hunter was a champion of the project.
He filled committee meetings with supporters and organized a public
campaign to send emails to council members.”
• The text on the second side is superimposed over a photograph of the
Property.
• The second side contains the following original text: “When it came to
protecting the Eastside’s interests, Ben Hunter let us down. Ben Hunter
cut a sweetheart deal for a political insider. A deal that cost the city
millions and ties up the former Eastgate site for 25 years. Code
enforcement violations. Fire and safety hazards. Investigations.
Lawsuits. A building so unsafe, it was evacuated. It’s a mess. A mess
that the Eastside is left to clean up. Vote David Ray for City-County
Council on November 3rd.”
• Additionally, the second side includes two media quotations, both from
the same September 13, 2013, Indianapolis Star article. First, “The
building was so dangerous that the fire department placed it on ‘fire
watch,’ which meant a fire marshal had to be on the premises 24 hours a
day to handle any emergency.” Second, “‘I cannot have people in this
facility that is deemed unsafe,’ Riggs[3] said.”
Appellees’ App. Vol. II p. 2-3. At no point does the Flyer mention or implicitly
refer to 401.
[7] On November 13, 2015, 401 and Lifeline filed a defamation complaint against
Ray and the Committee based solely on the Flyer. On February 12, 2016, Ray
and the Committee filed an answer and affirmative defenses, including an
affirmative defense based on the Anti-SLAPP Statute. On June 6, 2016, Ray
and the Committee filed a motion to dismiss based, in relevant part, on the
3
At that time, Troy Riggs was the acting Public Safety Director of Indianapolis.
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Anti-SLAPP Statute. Following briefing and a hearing, on August 23, 2016,
the trial court entered an order summarily granting the motion to dismiss based
on the Anti-SLAPP Statute. Lifeline and 401 now appeal.
Discussion and Decision
I. Standard of Review
[8] As required by the Anti-SLAPP statute, the trial court treated the motion to
dismiss as a motion for summary judgment, and we must do the same. Ind.
Code § 34-7-7-9(a)(1); see also Shepard v. Schurz Commc’ns, Inc., 847 N.E.2d 219,
224 (Ind. Ct. App. 2006) (acknowledging a conflict between the burden of proof
in the Anti-SLAPP statute and Trial Rule 56 and concluding that the conflict
must be resolved in favor of the statute). Our standard of review on summary
judgment is well established:
We review summary judgment de novo, applying the same
standard as the trial court: “Drawing all reasonable inferences in
favor of . . . the non-moving parties, summary judgment is
appropriate ‘if the designated evidentiary matter shows that there
is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law.’” Williams v.
Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
fact is ‘material’ if its resolution would affect the outcome of the
case, and an issue is ‘genuine’ if a trier of fact is required to
resolve the parties’ differing accounts of the truth, or if the
undisputed material facts support conflicting reasonable
inferences.” Id. (internal citations omitted).
Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Under the Anti-SLAPP
statute, the trial court should grant the motion if it finds that the movant has
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proved by a preponderance of the evidence that the act on which the claim is
based is a lawful act in furtherance of the person’s constitutional right of
petition or free speech. I.C. § 34-7-7-9.
II. The Anti-SLAPP Statute
[9] The Anti-SLAPP statute protects a person’s right of free speech under the
federal and state constitutions “in connection with a public issue or an issue of
public interest[.]” I.C. § 34-7-7-1. The statute provides as follows:
It is a defense in a civil action against a person that the act or
omission complained of is:
(1) an act or omission of that person in furtherance of the
person’s right of petition or free speech under the
Constitution of the United States or the Constitution of the
State of Indiana in connection with a public issue; and
(2) an act or omission taken in good faith and with a
reasonable basis in law and fact.
I.C. § 34-7-7-5.
[10] The Anti-SLAPP statute is intended to reduce the number of lawsuits brought
primarily to chill the valid exercise of the constitutional rights of freedom of
speech and petition for the redress of grievances. Hamilton v. Prewett, 860
N.E.2d 1234, 1241-42 (Ind. Ct. App. 2007). To reduce the number of lawsuits
brought to chill speech, a defendant who prevails on a motion to dismiss under
the Anti-SLAPP statute is entitled to recover reasonable attorney’s fees and
costs. I.C. § 34-7-7-7.
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[11] Finally, the Anti-SLAPP Statute does not “supplant the Indiana common law
of defamation,” but requires the person raising the defense to establish that his
speech was “lawful.” Shepard, 847 N.E.2d at 224 (citing I.C. § 34-7-7-9(d)).
To establish a claim of defamation, a plaintiff must prove the
existence of “‘a communication with defamatory imputation,
malice, publication, and damages.’” “[T]he actual malice
standard of proof required in defamation cases involving matters
of public or general concern applies not only to public figures, but
to private individuals as well.” This is so because, “in most
instances, there is little disparity in the ability of private versus
public individuals to obtain access ‘to the channels of effective
communication’ in order to ‘counteract false statements’” and
because “‘[a] citizen . . . assume[s] the risk of media comment
when he becomes involved . . . in a matter of general or public
interest.’” Actual malice exists when the defendant publishes a
defamatory statement “‘with knowledge that it was false or with
reckless disregard of whether it was false or not.’”
Id. at 224-25 (internal citations omitted).
A. Public Issue
[12] Speech is a matter of public concern within the context of the Anti-SLAPP
statute “if it is addressed to ‘any matter of political, social, or other concern to
the community,’ as determined by its content, form, and context.” Brandom v.
Coupled Prods., LLC, 975 N.E.2d 382, 386 (Ind. Ct. App. 2012) (quoting Love v.
Rehfus, 946 N.E.2d 1, 10 (Ind. 2001)). The Brandom Court found a California
court’s analysis of this issue to be instructive:
“[There are] three non-exclusive and sometimes overlapping
categories of statements that have been given anti-SLAPP
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protection. The first category comprises cases where the
statement or activity precipitating the underlying cause of action
was ‘a person or entity in the public eye.’ The second category
comprises cases where the statement or activity precipitating the
underlying cause of action ‘involved conduct that could affect
large numbers of people beyond the direct participants.’ And the
third category comprises cases where the statement or activity
precipitating the claim involved ‘a topic of widespread, public
interest.’ Courts have adopted these categories as a useful
framework for analyzing whether a statement implicates an issue
of public interest and thus qualifies for anti-SLAPP protection.”
975 N.E.2d at 385 (quoting Cross v. Cooper, 197 Cal. App. 4th 357, at 373 (Cal.
Ct. App. 2011)) (internal citations omitted). The Brandom Court explained that
an issue of public interest can be defined as broadly as “any issue in which the
public is interested . . . and the issue need not be ‘significant’ to be protected by
the Anti-SLAPP statute.” 975 N.E.2d at 385.
[13] We have little difficulty concluding that the speech at issue here was made in
connection with a public issue. The Flyer was mailed in the context of a
contested political election and raised issues related to a large, formerly
dilapidated and unsafe building in Indianapolis, taxpayer dollars, political
donations received by the incumbent candidate, and a twenty-five-year lease to
which the City was a party for which the incumbent strongly advocated. The
Lease had been the subject of inquiries by the City-County Council and
multiple media outlets for years before the Flyer was mailed. The public,
particularly the citizens and voters in the 19th District, had an undeniable
interest in all these issues. In fact, we believe that these issues likely fit into all
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of the three categories set forth above. Consequently, we find that the trial
court did not err by concluding that the Appellees met their burden of
establishing that the speech at issue related to a matter of public concern.
B. Without Malice, In Good Faith, and With
Reasonable Basis in Law and Fact
[14] In the context of defamation law, “good faith” has been defined as “‘a state of
mind indicating honesty and lawfulness of purpose; belief in one’s legal right;
and a belief that one’s conduct is not unconscionable.’” Nexus Grp., Inc. v.
Heritage Appraisal Serv., 942 N.E.2d 119, 122 (Ind. Ct. App. 2011) (quoting
Owens v. Schoenberger, 681 N.E.2d 760, 764 (Ind. Ct. App. 1997)).
Bad faith, then, appears to require, regardless of truth or falsity, a
statement the speaker “knew . . . was false or entertained serious
doubts as to its truth”; even if the speaker is “motivated by self-
interest,” a statement might not be in bad faith if the speaker
“genuinely believed that he was being factual and also believed
that it would be best for his community” to pursue the subject
matter of the statement.
Id. at 123.
[15] “Actual malice exists when the defendant publishes a defamatory statement
‘with knowledge that it was false or with reckless disregard of whether it was
false or not.’” Shepard, 847 N.E.2d at 225 (citations omitted).
Actual malice is not an objective standard of reasonableness;
rather, it is a subjective standard that requires one challenging the
speech, . . . , to prove by clear and convincing evidence that the
speaker “‘in fact entertained serious doubts as to the truth of his
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publication,’ or acted with a ‘high degree of awareness of . . .
probable falsity.’” A speaker is not required to verify facts before
speaking unless she has some reason to doubt the veracity of
those facts. The actual malice standard protects those negligent
or careless false statements of fact that are inevitable in free
debate.
Brandom, 975 N.E.2d at 390 (internal citations omitted).
[16] First we will consider these issues with respect to 401. The Flyer never once
mentions 401. It contains a photograph of a building that, in the end, 401
admitted was not even its building. Appellants’ App. p. 220. Instead, it is a
photograph of the building that used to be Eastgate Mall, which is partly owned
by 401. We cannot believe that a viewer of the Flyer would draw any
connection between 401 and the content of the Flyer. In other words, we
cannot conclude that the Flyer contained a single even arguably defamatory or
untrue statement with respect to 401; consequently, the Appellees could not
have acted with actual malice by including a photograph of a building that is
not, in fact, 401. The trial court did not err by granting summary judgment
with respect to 401.
[17] Next, we must turn to Lifeline and each of the statements contained in the
Flyer. First, there are reproductions of two reports of the 2010 and 2013
contributions made by Lifeline to Hunter’s campaign committee. There is no
dispute that these are true and accurate reproductions. Because the
reproductions are true and accurate, there is no malice in their inclusion.
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[18] Second, the Flyer contains four media quotations. The Appellants make no
claim that these quotations are false or inaccurate; and each quotation includes
the date on which it was published.4 As a result, we can only conclude that the
Appellees acted in good faith and with a reasonable basis in fact when including
these statements on the Flyer.
[19] Third, the Flyer states as follows: “What will $1,300 from a political insider
buy? A contract with the City. A contract Ben Hunter pushed for. On
November 3rd vote NO to sweetheart deals for political insiders.” Appellees’
App. Vol. II p. 2-3. As noted above, it is true that Lifeline—which is managed
by Carroll—donated $1,300 to Hunter’s campaign. It is also true that Hunter
then strongly advocated for and “champion[ed]” the Lease between 401—also
managed by Carroll—and the City. Id. at 108. While it may be true that the
implication that Lifeline “bought” Hunter’s assistance in procuring the Lease
with the City goes a step farther, we do not find that step sufficient to
undermine a conclusion that the Appellees acted in good faith and with a
reasonable basis in fact in making these statements on the Flyer.
[20] Fourth, the Flyer makes the following statements:
When it came to protecting the Eastside’s interests, Ben Hunter
let us down. Ben Hunter cut a sweetheart deal for a political
4
The Appellants argue that the articles constitute inadmissible hearsay, but the articles were not designated
to prove the truth of the matter asserted therein. Instead, they were designated to show that the quotations
on the Flyer were accurate and that the Appellees acted in good faith and had a reasonable basis in fact for
the statements made on the Flyer. Therefore, this argument is unavailing.
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insider. A deal that cost the city millions and ties up the former
Eastgate site for 25 years. Code enforcement violations. Fire
and safety hazards. Investigations. Lawsuits. A building so
unsafe, it was evacuated. It’s a mess. A mess that the Eastside is
left to clean up. Vote David Ray for City-County Council on
November 3rd.
Id. Again, each of these statements is either true or an opinion. These issues
were investigated and reported on by several reputable Indianapolis media
outlets and were the subject of a City-County Council inquiry. It is undisputed
that the Lease cost the City millions of dollars and had a term of twenty-five
years; it is undisputed that the City notified 401 of code violations, that the
Property was considered to be a fire and safety hazard, and that the building
was evacuated. The Appellants argue that the safety issues have all been
cleaned up since 2014, but because a politician’s past actions are always
relevant to current political campaigns, we do not find that to be an important
distinction. The fact that these statements are true means that the trial court
properly concluded that the Appellees acted in good faith and with a reasonable
basis in fact.
[21] The Appellees’ designated evidence establishes that the Appellees sent a series
of five mailers to potential voters to help introduce Ray to the electorate and
call into doubt Hunter’s record. There is no evidence that their intent was
malicious; instead, they mailed the Flyer as part of a hotly-contested political
campaign. See Journal-Gazette Co. v. Bandido’s, Inc., 712 N.E.2d 446, 456 (Ind.
1999) (holding that a defendant’s actual state of mind is a critical factor in
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determining whether he was acting with malice). They intended to question
Hunter’s political record, but there is no evidence that they intended to harm
Lifeline. In other words, the evidence establishes that they did not act in bad
faith or with actual malice.
[22] In sum, we find that the speech contained in the Flyer constitutes a matter of
public interest and that the Appellees have established as a matter of law that
they acted in good faith, without malice, and with a reasonable basis in law and
fact. Therefore, the trial court properly granted summary judgment in their
favor.
[23] The judgment of the trial court is affirmed.
Kirsch, J., concurs.
Mathias, J., concurs in part and dissents in part with separate opinion.
Court of Appeals of Indiana | Opinion 49A02-1609-PL-2132 | July 5, 2017 Page 13 of 16
IN THE
COURT OF APPEALS OF INDIANA
401 Public Safety and Lifeline Court of Appeals Case No.
Data Centers, LLC, 49A02-1609-PL-2132
Appellants-Defendant,
v.
David Ray and the Committee to
Elect David Ray,
Appellees-Plaintiff.
Mathias, Judge, concurring in part and dissenting in part.
[24] I agree with the majority’s conclusion that the speech at issue in this appeal
relates to a matter of public concern. I also agree that the trial court properly
granted summary judgment to the Appellees with respect to 401 Public Safety.
However, I do not agree with the majority’s conclusion that the Appellees
established as a matter of law that they acted in good faith and with a
reasonable basis in law and fact with respect to Lifeline Data Centers.
Court of Appeals of Indiana | Opinion 49A02-1609-PL-2132 | July 5, 2017 Page 14 of 16
[25] “[A] State has a legitimate interest in upholding the integrity of the electoral
process.” Brown v. Hartlage, 456 U.S. 45, 52 (1982). Importantly, “the free
exchange of ideas provides special vitality to the process traditionally at the
heart of American constitutional democracy — the political campaign.” Id. at
52-53.
[26] Presumably, a candidate for public office does not enter into the fray lightly, but
rather, armed with the knowledge that he or she may be attacked by a political
opponent in print, television, and social media. In addition, this case
demonstrates that a private company or individual who made a prior campaign
contribution to a candidate or politician can be involuntarily thrown into the
fray as well. In our current political climate, impugning the integrity of a private
company or individual is unfortunately considered fair game.
[27] Politicians can be held accountable for publishing dishonest statements to the
public with actual malice, i.e. “with knowledge that it was false or with reckless
disregard of whether it was false or not.” See Shepard v. Schurz Communications,
Inc. et. al, 847 N.E.2d 219, 225 (Ind. Ct. App. 2006). Requiring political
campaigns to refrain from publishing defamatory statements does not have a
chilling effect on responsible freedom of speech.
[28] Turning to the facts in this appeal, the designated evidence established that Ray
did not know who owned the former Eastgate Mall site when the flyer was sent
to his constituents. Appellant’s App. Vol II, p. 106. Henderson, Ray’s campaign
consultant who created the flyer, admitted that Lifeline’s donations to Hunter’s
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campaign had no impact on Hunter’s decision to support the City’s lease of a
portion of the former Eastgate Mall site. Appellant’s App. Vol. III, pp. 242,
248. Lifeline did not have a lease with the City, but the flyer implies that
Lifeline did have a contract with the City, and the contract was obtained by
donating money to Ben Hunter’s campaign. When considered as a whole, the
flyer also implies that Lifeline was responsible for the dangerous condition of
the building.
[29] After reviewing the flyer and other designated evidence, I would conclude that
whether Ray made the statements in the flyer without actual malice and in
good faith is a genuine issue of material fact that must be resolved by the fact
finder. I would therefore reverse the trial court’s entry of summary judgment for
Ray with respect to Lifeline’s claims.
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401 Public Safety and Lifeline Data Centers, LLC v. David Ray and the Committee to Elect David Ray
Combined Opinion