Fashion 21 v. Coalition for Humane Immigrant Rights of Los Angeles, 117 Cal. App. 4th 1138 (2004)

Fashion 21, a nationwide retailer of women’s clothing, purchased garments from manufacturers and sewing contractors that allegedly exploited their employees by refusing to properly pay them or provide them with clean and safe facilities in which to work. The Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA) attempted to negotiate a settlement with the company by which it would agree to accept responsibility for, and pay its proportionate share of, the allegedly unpaid wages of 19 garment workers. When the negotiations proved unsuccessful, CHIRLA called for a nationwide boycott of the company’s stores, picketed and issued press releases urging the public to contact the company and demand that it pay the workers the wages they were allegedly owed. In response, Fashion 21 filed a lawsuit against CHIRLA alleging defamation, interference with prospective business advantage, unfair business practices and nuisance. CHIRLA filed a motion to strike Fashion 21’s complaint as a SLAPP suit since Fashion 21’s claims arose from CHIRLA’s exercise of its first amendment right of free speech in connection with a public issue. The trial court denied CHIRLA’s motion, but the Court of Appeal reversed and held that Fashion 21 had failed to establish a reasonable probability of showing the falsity of CHIRLA’s statements regarding the company’s responsibility for the workers’ unpaid wages. The Court reasoned that pursuant to the Labor Commissioner’s interpretation of Labor Code § 2671, a retailer may, under certain circumstances, be liable for the unpaid wages of a manufacturer’s employees. Cf. Garment Workers Ctr. v. Superior Court, 117 Cal. App. 4th 1156 (2004) (CHIRLA should not have been ordered to comply with discovery requests before trial court determined if Fashion 21 had a reasonable probability of establishing libel).