A Newport Beach wig shop owner must pay $24,000 after a state appeals court affirmed that she libeled a customer in online posts.
The panel of three judges, in a Sept. 17 opinion, upheld Orange County Superior Court Judge Charles Margines' ruling that Constance Walsh, owner of Wiggin Out, wrote defamatory posts online about Cheryl Sanders, who bought a wig from the Newport Beach store in 2009.
"The patently false nature of the claims, Walsh's false denial that she posted the statements, and Walsh's hostile attitude towards plaintiff are substantial evidence to support the trial court's finding of malice," Justice Raymond J. Ikola wrote in the opinion.
Malice is one of the legal requirements for defining printed defamation, or libel.
In June 2009, Sanders bought a wig from Walsh for her mother, who had lost her hair while undergoing chemotherapy to treat breast cancer.
Sanders said Walsh assured her the wig was custom-made, but she later realized it was not. Her mom attempted to return the wig via Federal Express, but the salon refused the delivery, according to court documents
Walsh took Sanders' mother to small-claims court, where a judge ruled that Walsh was not owed money for the wig because of the attempt to return it.
Two months later, Walsh posted a "rebuttal" to a customer's critical posting on Ripoffreport.com regarding the court's decision.
"The rebuttal consists of a series of paragraphs prefaced by 'Fact:' explaining defendant's version of the facts, with editorial commentary interspersed throughout," according to the appeals court opinion.
In the post, Walsh said Sanders used an unauthorized check to buy the wig and fabricated a letter from FedEx in an effort to prove Sander's mother attempted to return the wig.
Several months later, an anonymous author posted on Yelp.com an accusation that Sanders participated in city corruption.
The same day, an anonymous author also attacked Sanders on MerchantCircle.com, writing: "Thank you Cheryl Sanders for hurting the community by giving all the construction business in Anaheim for a under the table bribe. I hope that an investigation takes place soon and you end up behind bars."
The posts allege that Sanders works in the Anaheim planning department. However, she testified that she works in the public utilities department, saying she had no control over who is awarded city contracts and that none of her family or friends has done contracting work for the city, according to the appeals court ruling.
Walsh testified that she authored the Ripoffreport.com post but denied responsibility for the two that accused Sanders of corruption. However, Sanders presented expert testimony that tied the email address used in the posts to Walsh and Wiggin Out, according to court documents.
In the appeal, Walsh's attorney argued that her postings were not damaging to Sander's reputation because the statements were made on an Internet review website, where readers would expect to see opinions rather than facts.
Chandler Parker, a Los Angeles based attorney who represented Walsh, said he is disappointed with the outcome of the case and the effect on the interpretation of defamation laws.
"It does raise a question of how we are supposed to evolve our defamation laws to protect businesses," he said. "Businesses should be able to protect themselves."
Parker said Walsh's case was put at a disadvantage because he was not able to reintroduce evidence from the small-claims case. If he had, he may have been able to verify that the letter sent via FedEx in 2009 was fake, he said.
"It was fundamentally unfair, but we have to live with it," he said.
Sanders' attorney was not immediately available for comment.