"C.A. Invalidates Statute Criminalizing Defamation of Bank"

"The First District Court of Appeal held yesterday that a previously uninterpreted 1917 statute which renders it a misdemeanor to spread untrue statements about the condition of a bank is constitutionally invalid.

 Writing for Div. Two, Justice Ignazio Ruvolo declared that Financial Code section 1327 “is an impermissible content-based restriction on speech protected by federal and state constitutional free speech guarantees.”

The opinion reverses an order denying an anti-SLAPP motion brought by Robert Rogers, a former employee of Summit Bank, sued by the Oakland-based institution for posting allegedly false comments about it on Craigslist.org. The trial court denied the motion based on a provision in the anti-SLAPP statute that protection will not be afforded where “the assertedly protected speech or petition activity was illegal as a matter of law.”

Section 1327—upon which the bank relied in asserting illegality of the postings—provides:
“Any person who willfully and knowingly makes, circulates, or transmits to another or others, any statement or rumor, written, printed, or by word of mouth, which is untrue in fact and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of any bank doing business in this state, or who knowingly counsels, aids, procures, or induces another to start, transmit, or circulate any such statement or rumor, is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars ($1,000), or by imprisonment for not more than one year, or both.”

Declaring the statute unconstitutional, Ruvolo noted that under a succession of cases springing from Times v. Sullivan (1964) 376 U.S. 254, public figures can only recover in an action for defamation if they can show that the statements were made with knowledge of their falsity or in reckless disregard of the truth."

"He wrote:

 “Financial Code section 1327 is unconstitutional on its face for the same reason similar statutes have been found to be unconstitutional––it does not contain a clear requirement of actual malice or any statutory language limiting its reach to those banks which are not considered public figures….

Instead, the language of the statute allows for criminal punishment of persons making statements ‘untrue in fact’ which are ‘willfully and knowingly made’ without a clear requirement that the prosecutor prove defendant’s knowledge of falsity or recklessness with regards to falsity.”"

Source
http://www.metnews.com/articles/2012/bank053012.htm