Phoenix Trading, Inc. v. Loops LLC

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PHOENIX TRADING, INC., a No. 11-36053

Washington corporation, DBA

Amercare Products Inc.; WENDY D.C. No.

HEMMING, an individual, 2:10-cv-00920-

Plaintiffs-Appellants, JLR

v.

OPINION

LOOPS LLC, a Delaware limited

liability corporation; LOOPS

FLEXBRUSH LLC, a Delaware

limited liability corporation; STEVEN

L. KAYSER, an individual,

Defendants-Appellees.

Appeal from the United States District Court

for the Western District of Washington

James L. Robart, District Judge, Presiding

Submitted April 11, 2013*

Seattle, Washington

Submission Vacated and Deferred July 15, 2013

Resubmitted October 4, 2013

Filed October 4, 2013

*

The panel unanimously finds this case suitable for decision without

oral argument. See Fed. R. App. P. 34(a)(2)(c).

2 PHOENIX TRADING, INC. V. LOOPS LLC

Before: A. Wallace Tashima and Consuelo M. Callahan,

Circuit Judges, and Raner C. Collins, District Judge.**

Opinion by Judge Tashima

SUMMARY***

Washington Anti-SLAPP Statute

The panel affirmed the district court’s order striking a

complaint under Washington’s anti-SLAPP statute.

In a defamation action arising out of a business dispute

between companies that design and distribute hygiene

products for prisoners, the panel held that the district court

did not abuse its discretion by entertaining the untimely anti-

SLAPP motion. The panel also held that plaintiff could not

show a likelihood of success as to any of the alleged

defamatory statements, and therefore, the complaint was

properly dismissed under Washington’s anti-SLAPP statute.

**

The Honorable Raner C. Collins, United States District Judge for the

District of Arizona, sitting by designation.

***

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

PHOENIX TRADING, INC. V. LOOPS LLC 3

COUNSEL

Brooks F. Cooper, Portland, Oregon, for Plaintiffs-

Appellants.

Nicholas L. Jenkins and Amber L. Pearce, Floyd, Pflueger &

Ringer, P.S., Seattle, Washington for Defendants-Appellees.

OPINION

TASHIMA, Circuit Judge:

This defamation action arises out of a business dispute

between companies that design and distribute hygiene

products for prisoners. One of those companies, Loops,

designed a flexible toothbrush made for safe use in prisons

and then bid on a contract with the New York City

Department of Corrections (“NYC-DOC”). The other

company, Amercare, ultimately won the contract using a

similar toothbrush. In a series of letters to government

officials and to the press, Loops then alleged that Amercare

had engaged in procurement fraud because, among other

things, Amercare had counterfeited Loops products. Based

on those statements, Amercare filed this defamation action in

Washington state court. The action was removed to the

Western District of Washington, and the district court granted

Loops’ motion to strike the complaint under Washington’s

anti-SLAPP statute. This appeal followed. We have

jurisdiction under 28 U.S.C. § 1291, and we affirm.

4 PHOENIX TRADING, INC. V. LOOPS LLC

I.

Plaintiffs-Appellants are Phoenix Trading, Inc., dba

Amercare Products, Inc., and Wendy Hemming (together

“Amercare”). Amercare imports and distributes toiletries and

health products, and it often contracts with correctional

institutions. Hemming is the majority shareholder and

president of Amercare. Defendants-Appellees are Loops

LLC, Loops Flexbrush LLC, and Steven Kayser (collectively,

“Loops”). Loops designs and markets oral hygiene products

for safe use in prisons. Kayser is the founder of Loops and

the inventor of the Loops Flexbrush, a toothbrush with a

flexible handle that cannot be altered into a shank.1 Loops

applied for a patent on the Loops Flexbrush in August 2004,

and the patent issued on February 26, 2008.

A. The Patent Litigation

On July 30, 2010, Loops filed a patent infringement

action in the Western District of Washington. In that action,

Loops alleged that: Amercare fraudulently obtained a sample

of the Loops Flexbrush; sent it to China for copying; and then

– relying on pricing information obtained from Loops –

underbid Loops for a contract with the NYC-DOC. Loops,

LLC v. Phoenix Trading, Inc., No. 08-1064, 2010 WL

3041866, at *1–*3 (W.D. Wash. 2010).

The district court granted partial summary judgment to

Amercare. It held that Loops could not recover monetary

damages because Amercare’s last sale of the allegedly

infringing toothbrush occurred no later than May 22, 2008,

1

A “shank” is a prison-made knife. See United States v. Urena,

659 F.3d 903, 905–06 (9th Cir. 2011).

PHOENIX TRADING, INC. V. LOOPS LLC 5

yet Loops had not adequately marked its product until

September 12, 2008, and had not notified Amercare of its

patent until June 13, 2008. Thus, the district court held that

under 35 U.S.C. § 287, Loops could not recover monetary

damages for its patent infringement claim. Id. at *4–*5,

*11–*12. The district court also granted summary judgment

on several related claims. Id. At *11–*12.2

B. The Defamation Litigation

On February 18, 2010, during the pendency of the patent

litigation, Amercare filed a defamation action against Loops

in Washington state court, and the action was later removed

to the Western District of Washington.3 Phoenix Trading,

Inc. v. Kayser, No. 10-0920, 2011 WL 3158416, at *1–*2

(W.D. Wash. 2011). The defamation claims target four sets

of statements.

1. Statements regarding alteration of Loops

toothbrushes

Loops – through either Kayser or Kayser’s counsel – sent

three letters to various New York City officials, all alleging

that Amercare had altered Loops toothbrushes and passed

them off as its own. All three letters were part of Loops’

2

A few months later, Loops filed a motion for discovery sanctions based

on newly discovered evidence. See Loops LLC v. Phoenix Trading, Inc.,

No. 08-1064, 2011 WL 915785, at *1, *6–*7 (W.D. Wash. 2011). For

reasons that do not bear on this appeal, the court sanctioned Amercare by

entering judgment in favor of Loops. Id. at *10.

3

Amercare had amended its state court complaint to add a claim for

false trademark registration under 15 U.S.C. § 1120. Phoenix Trading,

2011 WL 3158416, at *2. That claim was later voluntarily dismissed.

6 PHOENIX TRADING, INC. V. LOOPS LLC

claim that Amercare won the contract by way of procurement

fraud. The letters alleged that Amercare had filed off the

Loops trademark from sample Loops toothbrushes, affixed

the Amercare trademark, and presented the altered

toothbrushes to the NYC-DOC in its bid. The first letter, sent

on August 20, 2007, was addressed to Mayor Michael

Bloomberg and several other New York City officials. The

second letter, sent on August 22, 2007, was addressed to

Mario Crescenzo, New York’s Chief Contracting Officer.

The third letter, sent on September 12, 2007, was addressed

to New York’s Office of the General Counsel.

2. Statements regarding lead content of Amercare

toothbrushes

On February 18, 2008, Kayser sent a letter to New York

officials and several New York Times reporters, alleging that

Amercare toothbrushes were “laden with lead and heavy

metals” and had “excessive amounts of lead and heavy

metals.” These allegations were based on an examination –

conducted by Intertek (a testing laboratory) and

commissioned by Loops – of the Amercare toothbrushes.

The Intertek report had detected some levels of lead and other

heavy metals, but the report concluded that the products

easily complied with relevant regulations.

3. Statements regarding patent infringement

In certain communications, Loops accused Amercare of

infringing one of its patents. These statements were made,

with varying degrees of clarity, in: (1) the February 18, 2008,

letter discussed above; (2) an April 21, 2008, letter to various

New York City officials, which referenced toothbrushes that

the NYC-DOC purchased in 2007; (3) a May 19, 2008, letter

PHOENIX TRADING, INC. V. LOOPS LLC 7

sent to the International Anticounterfeiting Coalition (“IAC”),

the press, and various New York City officials; and (4) a July

29, 2008, letter to the press.

4. Statements regarding counterfeit Loops

toothbrushes

Loops also accused Amercare of “counterfeiting.” In

most of the letters discussed above, Loops stated that

Amercare had provided “counterfeit toothbrushes” to the

NYC-DOC. Similar allegations were contained in a letter

sent to the IAC, Harper’s Bazaar Magazine, and the New

York Sun.

C. District Court ruling

The parties filed cross-motions for summary judgment,

and Loops filed a special motion to strike under

Washington’s anti-SLAPP statute, Wash. Rev. Code

§ 4.24.525.4 The court first found that the anti-SLAPP

motion was timely. Phoenix Trading, 2011 WL 3158416, at

*6. The court then ruled that, under § 4.24.510, Loops was

immune from civil liability for all statements made to

government agencies or officials. Id. at *7.

Turning to the statements made to the media, the court

concluded that the statements were made to a “public forum

in connection with an issue of public concern” under

§ 4.24.525(2)(d). Id. As for the statements to the IAC, the

court held that they were in furtherance of Loops’ free speech

rights and in connection with an issue of public concern. Id.

4

All subsequent statutory references are to the Revised Code of

Washington, unless otherwise noted.

8 PHOENIX TRADING, INC. V. LOOPS LLC

at *8. Thus, with respect to the media and IAC statements,

the burden shifted to Amercare to show a probability of

success on the merits.

The court then concluded that Amercare failed to show a

likelihood of overcoming the two-year statute of limitations

for defamation claims. Id. at *9–*10. This deficiency

applied to the statements regarding product alteration and

counterfeiting. As for the remaining statements, the court

held that Amercare’s contract with a public agency placed it

in the role of a public official; accordingly, Amercare had to

show that Loops acted with malice. Id. at *11. In the district

court’s view, Amercare had failed to carry its burden of

showing malice with respect to any of the four categories of

statements. Id. at *11–*16. Accordingly, the court granted

the anti-SLAPP motion and denied the summary judgment

motions as moot. Id. at *16.

II.

A. The Anti-SLAPP Statute

Washington’s anti-SLAPP statute, like many others

throughout the country, was designed quickly to dispose of

and deter lawsuits that chill the exercise of speech and

petition rights. See S.S.B. No. 6395, 61st Leg., Reg. Sess.,

2010 Wash. Legis. Serv. Ch. 118, § 1. Under

§ 4.24.525(4)(a), “[a] party may bring a special motion to

strike any claim that is based on an action involving public

participation and petition.”5 The anti-SLAPP analysis then

5

An “action involving public participation” includes, among other

things:

PHOENIX TRADING, INC. V. LOOPS LLC 9

proceeds in two steps. First, the movant must show by a

preponderance of the evidence that the claim is “based on an

action involving public participation and petition.”

§ 4.24.525(4)(b). If the moving party meets that burden, the

responding party mush establish, by clear and convincing

evidence, a likelihood of success on the merits. Id. If the

responding party meets its burden, the motion must be

denied. Id.

Amercare did not contest the first step in the district court,

and on appeal it concedes that its claims involve public

participation. See Phoenix Trading, 2011 WL 3158416, at

*7–*8. Accordingly, after addressing the timeliness of the

motion, we address only the second step of the anti-SLAPP

analysis.

B. Standards of Review

We review an anti-SLAPP ruling de novo. Vess v. Ciba-

Geigy Corp., 317 F.3d 1097, 1102 (9th Cir. 2003). There is

little Washington caselaw on the relative burdens of proof

under Washington’s anti-SLAPP statute and, in such

(d) Any oral statement made, or written statement or

other document submitted, in a place open to the public

or a public forum in connection with an issue of public

concern; or

(e) Any other lawful conduct in furtherance of the

exercise of the constitutional right of free speech in

connection with an issue of public concern, or in

furtherance of the exercise of the constitutional right of

petition.

Wash. Rev. Code § 4.24.525(2)(d)–(e).

10 PHOENIX TRADING, INC. V. LOOPS LLC

circumstances, we may look to the standards governing

California’s similarly structured anti-SLAPP statute. See

Castello v. City of Seattle, No. C10-1457, 2010 WL 4857022,

at *4 (W.D. Wash. 2010) (applying California law because

the California Anti-SLAPP Act “mirrors” Washington’s anti-

SLAPP statute (citing Aronson v. Dog Eat Dog Films, Inc.,

738 F. Supp. 2d 1104, 1110 (W.D. Wash. 2010))). In

California, a plaintiff resisting an anti-SLAPP motion “must

demonstrate that the complaint is both legally sufficient and

supported by a sufficient prima facie showing of facts to

sustain a favorable judgment if the evidence submitted by the

plaintiff is credited.” Wilson v. Parker, Covert & Chidester,

50 P.3d 733, 739 (Cal. 2002) (internal quotation marks

omitted), abrogated on other grounds as stated in Hutton v.

Hafif, 59 Cal. Rptr. 3d 109,125 (Ct. App. 2007). Thus, “[t]he

burden on the plaintiff is similar to the standard used in

determining motions for nonsuit, directed verdict, or

summary judgment.” Gilbert v. Sykes, 53 Cal. Rptr. 3d 752,

763 (Ct. App. 2007) (internal quotation marks omitted).

III.

A. Timeliness

Amercare first argues that the anti-SLAPP motion was

untimely. Under § 4.24.525(5)(a), the motion “may be filed

within sixty days of the service of the most recent complaint

or, in the court’s discretion, at any later time upon terms it

deems proper.” The operative complaint in this matter was

filed on May 21, 2010, but the anti-SLAPP motion was not

filed until February 25, 2011. The district court excused the

delay, however, because (1) Amercare did not assert any

prejudice; and (2) the parties had not engaged in any

discovery. Phoenix Trading, 2011 WL 3158416, at *6. The

PHOENIX TRADING, INC. V. LOOPS LLC 11

court also noted that most of the evidentiary materials

associated with the anti-SLAPP motion were included in the

concurrently filed cross-motions for summary judgment. Id.

These were permissible factors to weigh in the timeliness

analysis; thus, the district court did not abuse its discretion by

entertaining the anti-SLAPP motion.

B. Likelihood of success

The crux of this appeal is whether Amercare met its

burden of showing a likelihood of success on the merits. The

district court’s merits determination centered on three issues:

(1) immunity under § 4.24.510; (2) the statute of limitations;

and (3) the elements of defamation.

1. Under § 4.24.510, Loops is immune for all

statements made to government agencies.

Section 4.24.510 grants “immun[ity] from civil liability”

for statements “to any branch or agency of federal, state, or

local government . . . regarding any matter reasonably of

concern to that agency.” This provision is considered

Washington’s first anti-SLAPP statute, which was later

expanded – both substantively and procedurally – by the

enactment of § 4.24.525 in 2010. See Aronson, 738 F. Supp.

2d at 1109. Immunity under § 4.24.510 does not require a

showing of good faith, Bailey v. State, 191 P.3d 1285, 1291

(Wash. Ct. App. 2008), and Washington courts describe it as

an affirmative defense. See Suggs v. Hamilton, 116 Wash.

App. 1016, No. 27141-9-II, 2003 WL 1298665, at *8

(Ct. App. 2003) (unpublished decision), rev’d on other

12 PHOENIX TRADING, INC. V. LOOPS LLC

grounds by In re Marriage of Suggs, 93 P.3d 161 (Wash.

2004).6

Amercare does not seem to dispute that § 4.24.510

attaches to Loops’ statements to government agencies and

officials, and it is clear that the provision applies. Mayor

Bloomberg, Mr. Crescenzo, and the other New York City

officials who received Loops’ statements are part of a

“branch or agency” of local government; likewise, the U.S.

Attorney and the U.S. Customs Agency are branches or

agencies of the federal government. Moreover, the

statements were “reasonably of concern” to these agencies

because they included allegations of procurement fraud,

public health threats, potential criminal conduct, and the

importation of counterfeit and/or patent-infringing products.

Accordingly, Amercare has failed to show a likelihood of

success with regard to any statements made to government

officials. We are thus left with the four categories of

statements that were made to either the press or to the IAC.

6

Under California law, the viability of an affirmative defense is properly

considered in resolving an anti-SLAPP motion. Indeed, “[s]everal

published cases have considered the validity of defenses in determining

whether the plaintiff has shown a probability of prevailing in the context

of [an anti-SLAPP motion].” Peregrine Funding, Inc. v. Sheppard Mullin

Richter & Hampton LLP, 35 Cal. Rptr. 3d 31, 43–44 & n.11 (Ct. App.

2005) (rejecting plaintiff’s contention that it had no obligation to disprove

affirmative defense in anti-SLAPP context). There is no indication that

Washington would apply a different rule, see Castello, 2010 WL 4857022,

at *4; thus, the district court properly considered the strength of Loops’

affirmative defenses in ruling on the motion to strike.

PHOENIX TRADING, INC. V. LOOPS LLC 13

2. The statute of limitations bars claims regarding

the product alteration and counterfeiting

accusations.7

(a) Background

As noted above, Amercare claims that the alteration and

counterfeiting accusations were defamatory. Loops argues

that these claims are barred by the two-year statute of

limitations. See Wash. Rev. Code § 4.16.100 (setting

limitation for libel and slander claims).8

Loops’ earliest statements regarding alteration and

counterfeiting were sent in August and September of 2007.

On October 4, 2007, Mario Crescenzo forwarded Hemming

(Amercare’s president) the August 20, 2007 letter from

Kayser, which accused Amercare of altering and

counterfeiting Loops toothbrushes. Crescenzo asked

Hemming to provide a “written response to the protest.”

Hemming responded in a letter sent sometime before October

23, 2007.9 In that letter, she denied that Amercare had altered

7

Amercare did not challenge the limitations ruling in its opening brief.

Loops addressed it briefly in its answering brief, and Amercare then

briefly addressed the issue in its reply. Accordingly, Amercare has likely

waived the right to challenge the statute of limitations ruling. Alaska Ctr.

for Env’t v. U.S. Forest Serv., 189 F.3d 851, 858 n.4 (9th Cir. 1999). As

discussed below, however, even if there was no waiver, the district court’s

limitations ruling can be affirmed on the merits.

8

Loops does not assert that claims premised on the other two categories

of statements – regarding patent infringement and lead content – were

barred by the statute of limitations.

9

Hemming’s letter to Crescenzo is not dated, but Crescenzo referred to

the letter in an October 23, 2007, email.

14 PHOENIX TRADING, INC. V. LOOPS LLC

Loops brushes “in any way.” She also stated that the

toothbrushes in Amercare’s warehouse “are in no way

counterfeit.” Despite these communications, Amercare did

not file its defamation action until February 18, 2010.

Phoenix Trading, 2011 WL 3158416, at *2.

Loops argues that Crescenzo’s letter to Hemming – and

her subsequent response – show that Amercare and Hemming

were aware of the operative facts supporting the defamation

claims as early as October 2007, and thus that the claims are

barred by the two-year limitations period.

(b) Analysis

“[A] cause of action accrues at the time the plaintiff knew

or should have known all of the essential elements of the

cause of action. The rule of law postponing the accrual of the

cause of action is known as the ‘discovery rule.’” White v.

Johns-Manville Corp., 693 P.2d 687, 691 (Wash. 1985).

“[T]he discovery rule requires a plaintiff to use due

diligence in discovering the basis for the cause of action.”

Clare v. Saberhagen Holdings, Inc., 123 P.3d 465, 467

(Wash. Ct. App. 2005). Thus, “when a plaintiff is placed on

notice by some appreciable harm occasioned by another’s

wrongful conduct, the plaintiff must make further diligent

inquiry to ascertain the scope of the actual harm. The

plaintiff is charged with what a reasonable inquiry would

have discovered.” Green v. A.P.C. (Am. Pharm. Co.),

960 P.2d 912, 916 (Wash. 1998).

On this record, Amercare has not shown a likelihood of

satisfying the statute of limitations. The Crescenzo letter –

which attached the August 20, 2007, Kayser letter – apprised

Amercare of the key allegations against it (counterfeiting and

PHOENIX TRADING, INC. V. LOOPS LLC 15

product alteration) and of the potential harm caused by these

statements (loss of the NYC-DOC contract). Indeed,

Amercare’s response letter asserted that Loops’ allegations

were false, thus demonstrating awareness of the potential

harm at that time. Accordingly, the district court properly

held that Amercare failed to show, by clear and convincing

evidence, a likelihood of success on the limitations issue.10

In light of our conclusions regarding § 4.24.510 immunity

and the statute of limitations, the only surviving defamation

claims involve the statements regarding lead content and

patent infringement that were made to either the IAC or to the

press. Neither § 4.24.510 nor the statute of limitations

applies to those statements and thus, as to those statements

only, we turn to the merits.

3. Amercare did not show a likelihood of satisfying

the elements of defamation.

“A defamation action consists of four elements: (1) a

false statement, (2) publication, (3) fault, and (4) damages.”

Duc Tan v. Le, 300 P.3d 356, 363 (Wash. 2013). “A public

official who sues for defamation may only recover damages

upon a showing that the defamatory statement was made with

10

Amercare contends that it was entitled to tolling of the limitations

period until it had acquired evidence of malice. But tolling is not

available simply because a plaintiff has not gathered all evidence

necessary to assert its strongest case; instead, the clock begins running as

soon as the plaintiff is aware of the “gravamen of the legal claim.” See

Blackledge v. City of Tacoma, 118 Wash. App. 1078, No. 28777-3-II,

2003 WL 22391010, at *3 (Ct. App. 2003) (unpublished decision)

(defamation claim accrued once plaintiff was on notice of statement in

question). Here, the gravamen of the claim was revealed in the Crescenzo

and Keyser letters.

16 PHOENIX TRADING, INC. V. LOOPS LLC

‘actual malice’ – that is, made with knowledge of its falsity

or with reckless disregard of its truth or falsity.” Herron v.

KING Broad. Co., 746 P.2d 295, 301 (Wash. 1987) (citing

N.Y. Times v. Sullivan, 376 U.S. 254, 279–80 (1964)).11

“‘Reckless disregard’ means (1) a high degree of awareness

of probable falsity, or (2) that the defendant in fact

entertained serious doubts as to the statement’s truth.” Id.

(internal quotation marks, citations, and alterations omitted).

(a) Statements regarding lead content

This claim centers on the February 18, 2008, letter sent to

New York City officials and several New York Times

reporters, alleging without elaboration that Amercare

toothbrushes were “laden with lead and heavy metals” and

had “excessive amounts of lead and heavy metals.” These

allegations were made despite the results of an earlier

examination (commissioned by Loops) of the Amercare

toothbrushes, which detected some levels of lead and other

elements, but concluded that the products easily complied

with federal regulations. Although Loops has § 4.24.510

immunity for the lead-content allegations made to

government officials, see Part III.B.1, supra, that immunity

does not apply to statements made to the press. We agree,

however, with Loops that the statements were nonactionable

opinions, rather than false statements of fact. See Robel v.

Roundup Corp., 59 P.3d 611, 621 (Wash. 2002) (“Because

11

The district court concluded that Amercare qualified as a “public

figure” because the statements in question involved the manner in which

Amercare performed duties under a public contract. See Phoenix Trading,

2011 WL 3158416, at *11 (citing Corbally v. Kennewick Sch. Dist.,

973 P.2d 1074, 1078 (Wash. Ct. App. 1999)). Amercare does not contest

this ruling; thus, we assume, without deciding, that Amercare qualifies as

a public figure and therefore must show malice.

PHOENIX TRADING, INC. V. LOOPS LLC 17

expressions of opinion are protected under the First

Amendment, they are not actionable.” (quotation marks

omitted)).

“To determine whether a statement is nonactionable, a

court should consider at least (1) the medium and context in

which the statement was published, (2) the audience to whom

it was published, and (3) whether the statement implies

undisclosed facts.” Dunlap v. Wayne, 716 P.2d 842, 848

(Wash. 1986). The first two factors indicate that the

statements were nonactionable opinions. The statements

were made in the context of a business dispute in which

Loops clearly had a pecuniary interest in undoing the

Amercare contract. Under such circumstances, the press

would have been prepared for hyperbole and exaggeration.

As the Washington Supreme Court has recognized, “[i]n the

context of ongoing public debates, the audience is prepared

for mischaracterizations and exaggerations, and is likely to

view such representations with an awareness of the subjective

biases of the speaker.” Id. Indeed, before sending the

allegedly defamatory statements, Kayser acknowledged that

his conclusion about lead content was just his “opinion.”

Moreover, Kayser’s use of the terms “excessive” and “laden

with” implies a statement of opinion because they are terms

of degree and approximation. The press – an audience that is

charged with investigating the accuracy of assertions – likely

would not have perceived these exaggerations as statements

of fact. See Haueter v. Cowles Publ’g Co., 811 P.2d 231, 239

(Wash. Ct. App. 1991) (statements that are “not provable as

false” but are instead “rhetorical hyperbole” are

nonactionable). Thus, the first two factors weigh against

Amercare.

18 PHOENIX TRADING, INC. V. LOOPS LLC

The third factor cuts somewhat in Amercare’s favor, but

is not dispositive. Loops’ statements implied some

knowledge of the lead content of Amercare’s products, yet

the letter did not reference or attach the Intertek report.

Nevertheless, the context and audience are sufficient to

preclude Amercare from meeting its burden as to the lead-

content statements. Indeed, “the context and audience often

ensure that any implicit facts will be perceived as ‘merely a

characterization of those facts.’” Robel, 59 P.3d at 622

(quoting Ollman v. Evans, 750 F.2d 970, 985 (D.C. Cir.

1984)). Moreover, the letter did offer to provide

“clarification and supporting documentation” if requested.

Accordingly, Amercare did not show a likelihood of success

as to the lead-content statements.

(b) Statements regarding patent infringement

Loops obtained a patent on the Flexbrush on February 26,

2008. But even before the patent issued, Loops made several

statements suggesting that Amercare was infringing its

patent. Amercare asserts that those pre-issuance statements

were defamatory. Most of these allegations were made to

government officials and thus, as discussed above, they

cannot sustain Amercare’s defamation claims. And although

Loops made oblique references to patent infringement in

certain communications with the press and the IAC, none of

those statements was defamatory.

First, the February 18, 2008, letter – which was addressed

to both government officials and to the press – accused

Amercare of “counterfeiting . . . patented products.” But

this statement simply accuses Amercare of counterfeiting,

and not patent infringement, and thus any claim based on this

statement is barred by the statute of limitations. See Part

PHOENIX TRADING, INC. V. LOOPS LLC 19

III.B.2, supra. Second, although the May 19, 2008, letter was

sent to the press and to the IAC, its only allegation was that

“these [city] agencies knowingly infringed on our patents.”

In other words, the letter – read charitably – appears to be

accusing the New York City government (rather than

Amercare) of some form of contributory infringement. Even

if the letter could be construed as accusing Amercare of

infringement, it was sent after the patent had issued and

Amercare has not asserted that post-issuance allegations of

infringement were defamatory. Third, Loops sent a July 29,

2008, letter to the press that enclosed various filings from the

patent litigation, including the complaint and a declaration

submitted by Kayser.12 As with the May 19 letter, this

communication was sent after the issuance of the patent and

is thus nonactionable. Moreover, there is nothing defamatory

about forwarding to the press public filings from a lawsuit.

See McNeal v. Allen, 621 P.2d 1285, 1287 (Wash. 1980)

(“Allegedly libelous statements, spoken or written by a party

or counsel in the course of a judicial proceeding, are

absolutely privileged if they are pertinent or material to the

redress or relief sought, whether or not the statements are

legally sufficient to obtain that relief.”). In sum, Amercare

failed to show that any of the statements regarding patent

infringement could sustain a defamation claim.

12

Amercare puts considerable emphasis on this declaration because in

it, Kayser retracts his allegation that Amercare altered Loops brushes

(though he maintained that Amercare brushes were “counterfeit” and

“infringing”). Amercare thus argues that this concession shows that

Loops acted with malice. However, because we rely on other bases,

discussed above, for rejecting the defamation claims, we do not reach the

question of malice.

20 PHOENIX TRADING, INC. V. LOOPS LLC

IV.

Amercare’s defamation action was premised on numerous

letters that Loops sent to New York City officials, the press,

and the IAC. The district court correctly held that Amercare

could not show a likelihood of success as to any of these

statements; thus, the complaint was properly dismissed under

Washington’s anti-SLAPP statute.

The judgment of the district court is AFFIRMED.