Court Opinion

ID: 3051635
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:36:46.187486+00
Date Added: 2024-06-11T11:49:26.104159
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

SDV/ACCI, INC.; R. GERALD             
METZ; TONIA METZ,
                                            No. 06-15860
             Plaintiffs-Appellants,
               v.                            D.C. No.
                                          CV-02-01529-VRW
AT&T CORPORATION; MARGARET E.
                                             OPINION
ROMAN,
            Defendants-Appellees.
                                      
       Appeal from the United States District Court
         for the Northern District of California
       Vaughn R. Walker, District Judge, Presiding

                  Argued and Submitted
       February 12, 2008—San Francisco, California

                   Filed April 11, 2008

  Before: William C. Canby, Jr., David R. Thompson, and
           Milan D. Smith, Jr., Circuit Judges.

                  Opinion by Judge Canby;
         Partial Concurrence and Partial Dissent by
                  Judge Milan D. Smith, Jr.

                           3817
3820         SDV/ACCI, INC. v. AT&T CORP.

                     COUNSEL

Paul Kleven, Berkeley, California, for the plaintiffs-
appellants.
               SDV/ACCI, INC. v. AT&T CORP.                3821
Kevin M. Fong, Pillsbury, Winthrop, Shaw, Pittman, LLP,
San Francisco, California, for the defendants-appellees.

                          OPINION

CANBY, Circuit Judge:

   Plaintiffs SDV/ACCI, Tonia Metz and Gerald Metz
brought this action against AT&T and one of its employees,
Margaret Roman, alleging that Ms. Roman defamed the plain-
tiffs in the course of her employment. The district court
granted summary judgment for the defendants, ruling that the
Metzes were not proper plaintiffs, and that the allegedly
defamatory statements were conditionally privileged. It fur-
ther ruled that SDV/ACCI, as the remaining plaintiff, could
not defeat the privilege because there was no evidence that
Ms. Roman made the allegedly defamatory statements with
malice or without a good faith belief in their truth. The plain-
tiffs appealed. We have jurisdiction pursuant to 28 U.S.C.
§ 1291. We affirm in part, and reverse in part.

   FACTUAL AND PROCEDURAL BACKGROUND

   Plaintiff SDV/ACCI, Inc., is a company that provides cli-
ents with consulting and staffing services. Plaintiffs Mr. and
Ms. Metz are the company’s CFO and CEO, respectively, and
its sole shareholders. Effective February 1, 1999, defendant
AT&T and SDV/ACCI entered into an agreement under
which SDV/ACCI would provide temporary workers to
AT&T and its subsidiaries. The agreement specified that all
invoices would be payable by AT&T ten days from the date
of receipt.

   The parties agree that over the life of the agreement, AT&T
failed to pay many of these bills on time. In her affidavit, Ms.
Metz claimed that she confronted AT&T procurement spe-
3822           SDV/ACCI, INC. v. AT&T CORP.
cialist Margaret Roman prior to November 2000 about these
payment problems. Ms. Metz claimed that, when confronted,
Ms. Roman told her that before Ms. Metz withdrew SDV/
ACCI’s services, she should consider how powerful AT&T
was and how it would appear to other clients if SDV/ACCI
could not meet its service obligations to AT&T. Moreover,
some complaints had arisen regarding payment of certain staff
by SDV/ACCI. Although the parties dispute the extent and
cause of these problems, it appears that they were due in part
to an internal embezzlement that SDV/ACCI had suffered, a
fact that Ms. Metz expressed to Ms. Roman. SDV/ACCI was
at all times solvent.

   On December 5, 2000, Mr. Metz notified Ms. Roman that
he was going to terminate the agreement because of AT&T’s
failure to pay the invoices within 10 days, and that payroll
would stop after that week. Ms. Roman protested that it was
especially difficult to effect a transition to other vendors on
such short notice, so Mr. Metz agreed to continue payroll until
December 15. Ms. Roman complained further that it was dif-
ficult to transfer employees around the holidays, and asked if
Mr. Metz was discontinuing service because of the recent
embezzlement at SDV/ACCI or “because you can’t afford to
do business?” Mr. Metz responded, “ACCI is healthy except
for the cost we’ve incurred from this contract, which I’m
resolving today. Marge, there’s nothing wrong with my busi-
ness except for the time I’m having to spend on our contract.”
Ms. Roman then asked Mr. Metz not to say anything to the
AT&T managers or employees about the transition, e-mailing
a similar request on December 15, 2000 that Mr. Metz inform
managers of the situation only on a “need to know” basis. Mr.
Metz swore in an affidavit that he believed Ms. Roman was
“very annoyed” and “felt animosity” toward him during the
phone call.

 After the conversation, Ms. Roman sent e-mails to several
AT&T managers stating that SDV/ACCI employees would be
               SDV/ACCI, INC. v. AT&T CORP.                3823
transferred to another vendor. The e-mails contained language
similar to the following:

    SDV/ACCI are currently having financial difficulties
    and can no longer provide services to AT&T.

Ms. Roman and another manager also sent these e-mails to
two individuals who worked for a competitor of SDV/ACCI
and who were involved with the transitions.

   In her deposition, Ms. Roman acknowledged that, at the
time she made the statements, she did not think SDV/ACCI
was unable to perform on the contract. Elsewhere, Ms. Roman
asserted that, at the time she made the statements, she
believed the plaintiffs’ financial difficulties may have played
a part in their decision. Ms. Roman also stated that she made
the statements to convey a sense of urgency to the recipients.

                        DISCUSSION

   We review de novo the district court’s grant of summary
judgment. Universal Health Servs., Inc. v. Thompson, 363
F.3d 1013, 1019 (9th Cir. 2004). In California, the definition
of libel includes “a false and unprivileged publication by writ-
ing . . . which has a tendency to injure [any person] in his
occupation.” Cal. Civ. Code § 45. We first consider whether
the Metzes as individuals were proper plaintiffs in this action.
After that, we address whether the district court erred when
it held that the common interest privilege foreclosed a trial on
the merits.

                               I

   The district court held that the Metzes could not sue as
individuals for defamation directed at their company because
the allegedly defamatory statements could not reasonably be
interpreted as referring to the plaintiffs as individuals. We
3824            SDV/ACCI, INC. v. AT&T CORP.
affirm on a somewhat different ground from that relied upon
by the district court.

   [1] In California, whether statements can be reasonably
interpreted as referring to plaintiffs is a question of law for the
court. Alszeh v. HBO, 67 Cal. App. 4th 1456, 1461 (1998). If
there is no express reference to the plaintiff in a defamatory
statement, the claim will fail unless the statement refers to the
plaintiff by reasonable implication. See Blatty v. N.Y. Times
Co., 42 Cal. 3d 1033, 1046 (1986) (intentional interference
case citing defamation cases).

   In some cases, it is relatively clear that defamatory state-
ments about a company can reasonably be understood to refer
to the owner of the company, as in Bohan v. The Record
Publ’g Co., 1 Cal. App. 429, 430-31 (1905), and Schiavone
Constr. Co. v. Time, Inc., 619 F. Supp. 684, 696-97 (D.N.J.
1985). In these cases the businesses bore the individual plain-
tiff’s name, and in Bohan the defamatory statement explicitly
referred to “the proprietor of the firm.” 1 Cal. App. at 430.
Neither case expressly required, however, that plaintiffs share
the name of their business in order to maintain a suit. AT&T
cites no California case (and we can find none) that addresses
the question whether an owner of a closely-held corporation
can maintain an action for a defamatory statement that refers
expressly to the business alone. Cases from other jurisdictions
give little aid because the results diverge greatly. See, e.g.,
U.S. Steel Corp. v. Darby, 516 F.2d 961, 964 n.4 (5th Cir.
1975) (shareholder suit disallowed, but suit as sole proprietor
permitted); A Shop Called East v. KYW-Channel 3, 8 Med. L.
Rptr. 1399, 1401-02 (D.N.J. 1982) (suit by dual owners of
corporation allowed); McBride v. Crowell-Collier Publ’g Co.,
196 F.2d 187, 189 (5th Cir. 1952) (suit by sole shareholder
disallowed). Thus we can draw no categorical conclusion
whether California would or would not infer that defamation
of a closely-held corporation would permit suit by its owners.

  [2] In the absence of a fixed rule, the Metzes argue that,
under the facts of their case, any defamation of their business
                SDV/ACCI, INC. v. AT&T CORP.                3825
could reasonably be understood as referring to them. They
contend that their “reputations were closely associated with
the small corporation that they owned, so that any statements
defaming SDV/ACCI regarding its financial problems and
inability to perform would necessarily reflect on their reputa-
tions.” We need not resolve this question, however, because
there is an independent ground to support the district court’s
decision. To proceed with their suit as individuals, the Metzes
must show not only that the statement could reasonably be
understood as referring to them as individuals, but also that
some third party understood the statement in this way. See
DeWitt v. Wright, 57 Cal. 576, 578 (1881); Smith v. Mal-
donado, 72 Cal. App. 4th 637, 645 (1999).

   The Metzes cite Church of Scientology of California v.
Flynn, 744 F.2d 694 (9th Cir. 1984), for the proposition that
“[i]t is sufficient if from the evidence the jury can infer that
the defamatory statement applies to the plaintiff.” Id. at 697
(quoting DiGiorgio Fruit Corp. v. AFL-CIO, 215 Cal. App.
2d 560 (1963)). The Metzes read Flynn as eliminating the
need to show that a third party actually understood the state-
ment to refer to the plaintiffs. We reject this contention. Flynn
arose out of a motion to dismiss for failure to state a claim;
the court held that dismissal was improper because, among
other reasons, the complaint alleged that the defamatory
remarks were understood by the listening public to apply to
the plaintiff. See Id. at 697.

   Flynn thus does not modify the rule that a defamatory state-
ment that is ambiguous as to its target not only must be capa-
ble of being understood to refer to the plaintiff, but also must
be shown actually to have been so understood by a third party.
See DeWitt, 57 Cal. at 578 (“[I]t is essential not only that it
should have been written concerning the plaintiff, but also
that it was so understood by at least some one third person.”);
Restatement (Second) of Torts § 564 cmt. a (1977) (“It is nec-
essary that the recipient of the defamatory communication
understand it as intended to refer to the plaintiff.”).
3826              SDV/ACCI, INC. v. AT&T CORP.
   [3] The Metzes failed to provide admissible evidence to
support this second requirement of their defamation claim.
They presented some testimony in the district court that third
parties communicated with them in a way that implied that the
allegedly defamatory statements referred to the plaintiffs as
individuals. The district court held that this evidence lacked
foundation and struck it from the record. The plaintiffs do not
challenge its exclusion on appeal. The plaintiffs cite no other
evidence in the record suggesting that any third party under-
stood the statements as referring to the Metzes by implication.

   [4] For the same reason, the Metzes cannot find refuge in
the well-settled doctrine that small groups of plaintiffs may
sometimes recover even though they are defamed in the
aggregate. See Blatty, 42 Cal. 3d at 1046 (collecting cases and
holding that individual defamation suits may lie when groups
with fewer than twenty-five members are defamed); Kil-
patrick, 88 A. 839, 840 (N.J. Sup. 1913); Restatement (Sec-
ond) of Torts § 564A. The alleged defamation in this case
referred only to the corporation. The Metzes have not pro-
duced admissible evidence to show that the defamation was
understood by any third party to apply to a group that
included the Metzes. During her deposition, Ms. Roman testi-
fied that she knew of two recipients of the e-mail who had
previously dealt directly with the Metzes. There was no evi-
dence other than the Metzes’ unfounded assertions to suggest
that these managers, or any other recipient of the e-mails,
knew about the ownership structure of SDV/ACCI and the
Metzes’ roles within the organization. This evidence, without
more, is not sufficient to support an inference that any man-
ager understood the e-mails to refer to the Metzes in addition
to SDV/ACCI.1
   1
     The Metzes place great weight in the fact that the “SDV” portion of the
SDV/ACCI name stands for “Service Disabled Veteran,” indicating that
the company is qualified to do business as a Disabled Veteran Business
Enterprise under federal and California law. The plaintiffs insist that this
phrase refers “specifically” to Mr. Metz as the service disabled veteran in
the enterprise, so any defamation of SDV/ACCI would necessarily defame
Mr. Metz. We reject this contention. There has been no showing that the
recipients of the e-mails understood the acronym “SDV” to refer to Mr.
Metz.
                SDV/ACCI, INC. v. AT&T CORP.                3827
   [5] In holding as we do, we do not impugn the common law
rule that circumstantial evidence may be used to prove that
defamatory material was published to a third party who rea-
sonably understood it to refer to the plaintiffs. See Food Lion,
Inc. v. Melton, 458 S.E.2d 580, 585 (Va. 1995) (collecting
cases from seven other states). It is not always necessary for
a plaintiff to present “testimony from a third party regarding
what that person heard and understood.” Id. We simply apply
the rule that when a defamatory statement identifies the plain-
tiff only by implication, and the implication is reasonable but
by no means necessary, the plaintiff carries a corresponding
burden to present evidence that a recipient of the statement
made the implied connection. See Davis v. Hearst, 116 P.
530, 548 (Cal. 1911) (“[W]here the libel is covertly expressed
or ambiguous worded, evidence is required to show that the
plaintiff is the party to whom it applies, or was intended to
apply. But . . . if the jury find that any person to whom it was
published would understand it as applying to the plaintiff, that
will be sufficient to sustain the verdict.” (quoting Henry Fol-
kard, Slander & Libel at 276 (7th ed. 1908))), overruled on
other grounds by Sheldon Appel Co. v. Albert & Oliker, 47
Cal. 3d 863 (1989); Dan B. Dobbs, The Law of Torts § 405
(2000) (“[E]xtrinsic facts, if known to at least one recipient of
[a publication not internally identifying the plaintiff], may
demonstrate that it referred to the plaintiff.”).

   [6] Because there was no evidence that the e-mails were
actually understood by any recipient to refer to the plaintiffs,
we need not address whether any such understanding was rea-
sonable under Bohan and Blatty. Therefore, we hold that the
Metzes have not presented sufficient evidence to proceed with
their claim as dual proprietors of SDV/ACCI.

                               II

  [7] AT&T next contends that even if the e-mails were
defamatory with respect to SDV/ACCI, the contents of the e-
mails were privileged and therefore not actionable. California
3828            SDV/ACCI, INC. v. AT&T CORP.
Civil Code Section 47(c) specifies that privilege protects a
statement made

    [i]n a communication, without malice, to a person
    interested therein, (1) by one who is also interested,
    or (2) by one who stands in such a relation to the
    person interested as to afford a reasonable ground for
    supposing the motive for the communication to be
    innocent, or (3) who is requested by the person inter-
    ested to give the information. . . .”

“The applicability of the [Section 47(c)] privilege provision is
a question of law where . . . the facts alleged to give rise to
the privilege are undisputed.” Vackar v. Package Machinery
Co., 841 F. Supp. 310, 313 (N.D. Cal. 1993). For reasons we
set forth below, we hold that this common interest privilege
is potentially applicable to Ms. Roman’s e-mails, but that
issues of fact remain that render summary judgment inappro-
priate.

  A.   The Occasion for the Communication

   [8] “The defendant has the initial burden of showing the
allegedly defamatory statement was made on a privileged
occasion . . . .” Kashian v. Harriman, 98 Cal. App. 4th 892,
915 (2002). We conclude that the defendants have carried this
initial burden. Ms. Roman communicated the allegedly libel-
ous statements to employees of AT&T and others involved
with transferring the employees to a new vendor. She shared
a business and organizational relationship with the recipients.
Therefore, the privilege extends to these relationships.

   The plaintiffs argue, however, that Ms. Roman’s communi-
cations exceeded the scope of the privilege. The privilege
“may be lost if the defendant abuses the privilege by exces-
sive publication or the inclusion of immaterial matter which
have no bearing upon the interest sought to be protected . . . .”
Gardner v. Shasta County, No. 2:06-CV-0106, 2007 WL
                SDV/ACCI, INC. v. AT&T CORP.                 3829
3243847, at *5 (E.D. Cal. Nov. 1, 2007) (quoting Deaile v.
Gen. Tel. Co., 40 Cal. App. 3d 841, 847 (1974)). “[T]o be
protected, the communication must be one reasonably calcu-
lated to further [the common] interest.” Cuenca v. Safeway
S.F. Employees Fed. Credit Union, 180 Cal. App. 3d 985, 995
(1986) (citation and internal quotation marks omitted).

   [9] The plaintiffs argue that Ms. Roman’s communications
fell outside the scope of the privilege because the recipients
“had no legitimate common interest in SDV/ACCI’s ‘finan-
cial difficulties.’ ” Perhaps this is so insofar as the “financial
difficulties” phrase was not strictly necessary to the message
that Ms. Roman needed to convey, namely, that employees
needed to be transferred to a new vendor. The plaintiffs’
approach, however, places too drastic a restraint on the scope
of the common interest privilege, a scope that is “not capable
of precise or categorical definition.” Kashian, 98 Cal. App.
4th at 914. The standard is one of reasonableness, not of
necessity. See Cuenca, 180 Cal. App. 3d at 995. Even putting
aside Ms. Roman’s asserted desire to convey a sense of
urgency, which is in dispute, the “financial difficulties”
phrase still has relevance to the underlying communication.
Conceivably, it provides the recipients with an understanding
of why they have been assigned a difficult task. It puts to rest
any urge to blame Ms. Roman or AT&T for the unwelcome
news. It also undermines any hope of challenging the order;
these “financial difficulties” make the managers’ task immi-
nent and unavoidable. Therefore, the common interest privi-
lege is applicable on its face to the “financial difficulties”
language.

  B.   Ms. Roman’s State of Mind

  [10] Even if the communication furthers a common interest
of the parties to the communication, a plaintiff may still
defeat the privilege. Section 47(c) specifies that the privilege
does not protect statements made with malice. In addition,
California courts have held that “ordinarily the privilege is
3830              SDV/ACCI, INC. v. AT&T CORP.
lost if defendant has no reasonable grounds for believing his
statements to be true.” Inst. of Athletic Motivation v. Univ. of
Ill., 114 Cal. App. 3d 1, 12 (1980). We hold that, contrary to
the view of the district court, triable issues exist as to malice
and good faith, so summary judgment on this issue was
improper.

  1.     Malice

  [11] “Malice” as used in section 47(c) includes the follow-
ing subjectively oriented definition:

          “Malice” . . . means a state of mind arising from
       hatred or ill will, evidencing a willingness to vex,
       annoy or injure another person. Thus the privilege is
       lost if the publication is motivated by hatred or ill
       will toward plaintiff, or by any cause other than the
       desire to protect the interest for the protection of
       which the privilege is given.

Cabanas v. Gloobt Assocs., 942 F. Supp. 1295, 1301 n.7
(E.D. Cal. 1996) (citations and internal quotation marks omit-
ted). Malice may not be inferred from the publication itself.
Cal. Civ. Code § 48. The plaintiff bears the burden of proving
malice. Lundquist v. Reusser, 7 Cal. 4th 1193, 1211 (1994).

   A showing that malice merely exists is not sufficient to
defeat the privilege. “If the occasion is conditionally privi-
leged, if the defendant’s primary motive is the advancement
of the interest which the privilege protects and if he speaks in
good faith, the mere fact that he harbors ill will toward the
plaintiff should be a neutral factor.” Biggins v. Hanson, 252
Cal. App. 2d 16, 20 (1967).

  The district court based its conclusion that the plaintiffs
could not show malice solely on a bit of deposition testimony
where Mr. Metz admitted a belief that Ms. Roman did not
“hate” him and his wife at the time Ms. Roman sent the e-
                SDV/ACCI, INC. v. AT&T CORP.                 3831
mails. This admission, however, is but one piece of evidence
and it will not bear the conclusive effect that the district court
accorded it on the issue of malice. See Fed. R. Civ. P. 36 advi-
sory committee’s note (contrasting the binding effect of a
Rule 36 admission with the effect of an evidentiary admission
of a party); Sanders v. N.Y.C. Human Res. Admin., 361 F.3d
749, 757 (2d Cir. 2004) (Rule 801 admission of opinion is not
binding admission under Rule 36); Punzak v. Allstate Ins. Co.,
No. 07-1052, 2007 WL 1166087, at *5 (E.D. Pa. Apr. 16,
2007).

   Regardless of its truth, Mr. Metz’s statement does not dis-
pose of the question at issue. Cabanas defines malice to
include hatred or ill-will, specifying that the privilege is also
lost if the communication is motivated “by any cause other
than the desire to protect the interest for the protection of
which the privilege is given.” Cabanas, 942 F. Supp. at 1301
n.7. Whether or not Ms. Roman hated plaintiffs at the time the
e-mails were sent is not the same question as whether Ms.
Roman was primarily motivated by ill will, spite, or some
other improper motive, in sending the e-mails. Mr. Metz rec-
ognized this distinction in his testimony when he stated that
Ms. Roman felt “animosity” though she did not hate him.

   [12] Moving beyond the district court’s reasoning, we hold
that the plaintiffs presented enough evidence of malice to sur-
vive summary judgment. Ms. Metz stated in her affidavit that
when confronted regarding AT&T’s performance under the
contract, Ms. Roman made menacing comments to the plain-
tiffs about the dangers of withdrawing services from such a
big company. Ms. Roman made the allegedly defamatory
statements shortly after the plaintiffs had renounced the con-
tract. In addition, Mr. Metz formed an impression that Ms.
Roman became angry when he withdrew his services, an
impression supported by the arguably mocking question Ms.
Roman asked about his ability to do business. These circum-
stances permit an inference that she included the alleged defa-
mation in her e-mail to make good on her prior threat. The
3832           SDV/ACCI, INC. v. AT&T CORP.
implication of Ms. Roman’s statement—that plaintiffs were to
blame for the situation—might be viewed by a trier of fact as
disingenuous in light of the repeated failure of AT&T to pay
SDV/ACCI’s bills on time. The fact that Ms. Roman
instructed Mr. Metz not to communicate with the managers
might also contribute to a finding by a reasonable trier of fact
that Ms. Roman had a motive to deceive beyond the common
purpose protected by the privilege. Mr. Metz stated in a depo-
sition that he did not believe Ms. Roman harbored animosity
toward him prior to December 5. However, the issue in this
case is Ms. Roman’s state of mind at the time she sent the e-
mails, not her state of mind prior to December 5. Making all
inferences in the light favorable to the plaintiffs, we conclude
that there is enough circumstantial evidence to permit a rea-
sonable trier of fact to find that malice primarily motivated
the publication regarding SDV/ACCI’s financial difficulties
and ability to perform under the agreement.

  2.   A Good Faith Belief in the Truth of the Statement

   [13] Finally, a plaintiff can defeat the privilege by showing
that the defendant “ha[d] no reasonable grounds for believing
[the] statements to be true.” Inst. of Athletic Motivation, 114
Cal. App. 3d at 12. Prior to sending the e-mails, Ms. Roman
was told by Ms. Metz that the plaintiffs had suffered some
setbacks stemming from an instance of embezzlement. Mr.
Metz also told Ms. Roman, before she sent the e-mails, that
the plaintiffs were not in financial distress, and that the only
problem of their business was the cost of, and time taken by,
the AT&T contract. Nothing in the record suggests that Ms.
Roman had firsthand knowledge of the plaintiffs’ financial
position, except to the extent AT&T was failing to make
timely payments. During her deposition, Ms. Roman admitted
that at the time she sent the e-mails, she understood that the
plaintiffs “were able to [provide services], but they chose not
to.” At another point, Ms. Roman testified that Mr. Metz had
told her “he couldn’t do it [provide services] any more.”
These factors, particularly when viewed alongside the evi-
                SDV/ACCI, INC. v. AT&T CORP.                 3833
dence of malice, raise a triable issue as to her good faith belief
in the truth of her statement, an issue that a trier of fact must
decide. Therefore, we reverse the grant of summary judgment
on the issue of good faith.

                        CONCLUSION

   Because the Metzes presented no evidence that any recipi-
ent of Ms. Roman’s e-mails understood the e-mails to refer to
the Metzes as distinct from their corporation, we hold they
cannot proceed in their claim as individuals. Therefore, sum-
mary judgment was appropriate as to them. SDV/ACCI may
nonetheless proceed with its action. Although the common
interest privilege potentially applies, it does not bar the action
as a matter of law because genuine issues of fact remain as to
whether malice was Ms. Roman’s primary reason to include
the alleged defamation in her e-mails and whether Ms. Roman
lacked a good faith belief in the truth of her statement. We
therefore reverse the summary judgment against SDV/ACCI
and remand for further proceedings consistent with this opin-
ion.

  The plaintiffs are entitled to two-thirds of their costs on
appeal.

 AFFIRMED in part, REVERSED in part, and
REMANDED.

MILAN D. SMITH, JR., Circuit Judge, concurring in part,
and dissenting in part:

   I concur in Part I of the majority opinion, affirming sum-
mary judgment as to the Metzes’ individual claims because
they have failed to present evidence that any recipient of the
emails actually understood them to refer to plaintiffs. I
respectfully dissent, however, as to Part II.B because I would
3834              SDV/ACCI, INC. v. AT&T CORP.
further hold that the Metzes have also failed to present evi-
dence of malice or bad faith sufficient to vitiate the common
interest privilege, and I would affirm the district court’s grant
of AT&T’s motion for summary judgement.

1.       Malice

   I agree that the district court erred to the extent it concluded
that Mr. Metz’s statement that Ms. Roman did not “hate” him
and his wife was a binding admission that estopped the
Metzes from contending that Ms. Roman’s email was moti-
vated by malice. That remark, given in a deposition and
immediately qualified,1 does not constitute a judicial admis-
sion that would bar presentation of evidence that Ms. Roman
was motivated by malice, whether mere “animosity” or out-
right hatred. Removing that bar, however, does not relieve the
plaintiffs of the burden of proving not only that malice was
present when Ms. Roman wrote the email, but also that malice
was the primary motive for the communications. “[I]f the
publication is made for the purpose of protecting the interest
in question, the fact that the publication is inspired in part by
resentment or indignation at the supposed misconduct of the
person defamed does not constitute an abuse of the privilege.”
Williams v. Taylor, 129 Cal. App. 3d 745, 752-53 (1982)
(quoting Restatement (Second) of Torts § 603, cmt. a (1977));
Biggins v. Hanson, 252 Cal. App. 2d 16, 20.

   Mr. Metz’s assertion, made in his deposition, that Ms.
Roman felt “animosity” toward him not rising to the level of
hatred cannot constitute “evidence” of malice. Mr. Metz spec-
ulated that “there was some anger, you know, some hostility”
because his actions required Ms. Roman to work over the hol-
idays, but admitted that “[t]hats just me. That’s just what I
think.” When pressed as to why he thought that, Mr. Metz
     1
   Mr. Metz clarified a few seconds thereafter, “She definitely didn’t like
working vacation—during the Christmas, but I don’t think—hate’s a
pretty big word.”
                SDV/ACCI, INC. v. AT&T CORP.                3835
was clear that his belief was based solely on the fact that Ms.
Roman had written a false statement in her email: “It’s not a
good statement to say. So what drove it? The only thing I can
think that drove it is negative feelings, you know.” Cal. Civ.
Code § 48 is clear, however, that malice cannot be inferred
from the fact of the communication itself.

   Apart from Mr. Metz’s assertions of “anger” and “animosi-
ty,” the only other concrete evidence the plaintiffs have prof-
fered is Ms. Metz’s report of a threat by Ms. Roman, some
unspecified time earlier, that the Metzes “needed to consider
that AT&T was very powerful before withdrawing any ser-
vices, because it would not look good if other clients thought
we would not service AT&T properly, and she would spread
the information widely.” The services were withdrawn, and
shortly thereafter, Ms. Roman sent her emails. While relevant
to an inquiry into malice, such a remark, without more, does
not perceptibly advance plaintiffs’ cause. “The mere existence
of a scintilla of evidence in support of the plaintiff’s position
will be insufficient; there must be evidence on which the jury
could reasonably find for the plaintiff.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 252 (1986). No reasonable jury,
even if it believed that the threat was actually uttered, could
infer from the threat alone that malice, rather than the privi-
leged purpose, was the primary motivation for Ms. Roman’s
email.

2.   Good Faith Basis

   The majority also errs in stating that plaintiffs have pro-
vided sufficient evidence to meet their burden that the defen-
dant had no reasonable ground for believing her statements to
be true. At the time the subject emails were sent, Ms. Metz
had personally told Ms. Roman by email that SDV/ACCI had
suffered a large-scale theft by employees who had disrupted
SDV/ACCI’s accounting system in an effort to cover their
tracks. She also knew that several AT&T managers had com-
plained about late and improperly calculated paychecks. She
3836           SDV/ACCI, INC. v. AT&T CORP.
knew from an email sent by Shirley Delia, a co-worker who
had spoken with Mr. Metz, that SDV/ACCI had suffered sig-
nificant financial problems caused by Mr. Metz’s medical dis-
abilities. Finally, she knew that Mr. Metz was calling to
abruptly cancel the SDV/ACCI contract because of late pay-
ments, and would not even grant an extension so the transition
could occur after the holidays. Mr. Metz’s assurance to Ms.
Roman during that same conversation that SDV/ACCI was
not in financial trouble is insufficient to negate a good faith
belief Ms. Roman might have had about plaintiffs’ financial
position: Common sense suggests that what Mr. Metz said is
exactly the type of comment the owner of a company on the
verge of insolvency would make.

    The only evidence on this issue in plaintiffs’ favor is Ms.
Roman’s contradictory remarks in testimony: at one point in
the deposition, she commented that “[a]t that point they were
able to [provide services], but they chose not to”; at another,
she says that “[H]e couldn’t do it anymore.” This apparent
contradiction, however, does nothing to undermine the other
evidence of SDV/ACCI’s financial instability Roman had at
the time—the “multitude of factors” she cited in testimony as
the basis for her belief that SDV/ACCI was in financial diffi-
culty. In other words, plaintiffs’ case rests upon a mere scin-
tilla, which I would hold is insufficient to defeat the
privileged occasion and avoid summary judgment.

   Because I do not believe that a reasonable jury, presented
with the two modica of evidence that plaintiffs have put for-
ward to defeat the privileged occasion, could find either the
presence of malice or the absence of reasonable grounds to
believe the truth of the emails’ content, I respectfully dissent
from the majority opinion, and would affirm the district
court’s grant of summary judgement for AT&T.