SAN RAFAEL, Calif. (HedgeWorld.com)–Overstock.com Inc.’s much-publicized litigation against Rocker Partners LP and Gradient Analytics Inc., over their alleged conspiracy to manipulate Overstock’s share price downward, survived a motion to dismiss brought by the defendants under California’s anti-SLAPP laws.
The acronym stands for “strategic lawsuits against public participation,” and California’s civil code, ?425.16 is designed to protect citizens from meritless lawsuits brought in order to chill their use of their free-speech rights.
Judge Vernon Smith found, first, that the defendants had met their initial burden in an anti-SLAPP motion, that of showing that “plaintiffs’ action arises from and/or is based on an act of defendants in furtherance of their right to free speech in connection with an issue of public interest” –specifically, analyses of the value of Overstock’s equity, published by Gradient and its predecessor Camelback and allegedly ghostwritten by employees of defendant Rocker.
But aside from that showing, the party bringing an anti-SLAPP motion must show that there is no probability that plaintiff will prevail on the merits. Judge Smith believes that the plaintiff does have a prima facie case on the merits. He was apparently favorably impressed in particular by the declaration of Demetrios Anifantis, a former customer representative for Camelback.
Mr. Anifantis’ declaration, filed with the court in connection with this lawsuit, states for example: “I recall discussions over the telephone on which I was present in which David Rocker … Marc Cohodes … or other representatives of a hedge fund called Rocker Partners LP requested that the special report contain more negative information, or that the report emphasize a specific negative fact and that the report downplay any positive facts, or make other editorial requests.” Furthermore, his declaration continues, it was Camelback’s practice to comply with such requests.