From Zhou v. Breed, decided Friday by the Ninth Circuit (Judges John Owens and Michelle Friedland, and visiting Sixth Circuit Judge Danny Boggs):
Appellants allege that both [S.F. Mayor London] Breed and Clear Channel violated their First Amendment right to free speech. To the extent that Appellants argue that Breed, or any public official, violated their First Amendment rights simply by speaking critically of a billboard or calling for its removal, that theory is squarely foreclosed by precedent.
We have previously joined a "host of other circuits" in holding that "public officials may criticize practices that they would have no constitutional ability to regulate, so long as there is no actual or threatened imposition of government power or sanction." Am. Fam. Ass'n, Inc. v. City & County of San Francisco (9th Cir. 2002); see also id. ("[L]etters which encouraged but did not threaten or intimidate landowner to terminate lease with billboard owner did not violate billboard owner's First Amendment rights." (citing R.C. Maxwell Co. v. Borough of New Hope (3d Cir. 1984))). Appellants have not alleged that, in criticizing one of Appellants' billboards, Breed or any public official made any threats of government sanction against Zhou, AAFPAC, Clear Channel, Outfront Media, Inc. …, or anyone.
Appellants' argument that their First Amendment rights were violated when Clear Channel, a private company, removed one of their billboards also fails. "A threshold requirement of any constitutional claim is the presence of state action." We "start with the presumption that private conduct does not constitute governmental action." Appellants do not allege any facts or put forward any plausible legal theory that would support treating Clear Channel as a state actor in this case.
The mere fact that Breed or other public officials criticized a billboard or called for its removal, without coercion or threat of government sanction, does not make that billboard's subsequent removal by a private party state action. See also Am. Mfrs. Mut. Ins. Co. v. Sullivan (1999) ("Action taken by private entities with the mere approval or acquiescence of the State is not state action."). Nor does the fact that companies that own billboards might be subject to some government regulations convert Clear Channel's decision to take down the billboard following public officials' criticism into state action. See Manhattan Cmty. Access Corp. v. Halleck (2019) ("Put simply, being regulated by the State does not make one a state actor."); Mathis v. Pac. Gas & Elec. Co. (9th Cir. 1989) ("[T]hat PG & E is a public utility subject to extensive state regulation … without more, is insufficient to infuse its conduct with state action."). Because Appellants have failed to allege state action, the district court properly dismissed their First Amendment claim.
{Appellants argue that, even if their allegations could not support a coercion theory of state action or a regulation theory of state action when those theories are analyzed separately, their allegations could support a finding of state action if those theories were analyzed together. That argument also fails.} …
The district court correctly struck, pursuant to California's anti-SLAPP statute, Appellants' claims against Breed for inducing breach of contract and intentional interference with a contractual relationship….
Appellants do not have a sufficient legal basis for either of their tort claims asserted against Breed. To succeed on their claim for inducing a breach of contract, Appellants must show that a contract "was in fact breached." Because … Appellants cannot show that Clear Channel breached its contract [given that the contract allowed Clear Channel to terminate it], Appellants' claim against Breed for inducing a breach of contract necessarily fails.
To succeed on their claim for intentional interference with a contractual relationship, Appellants must show that Breed knew of Appellants' billboard contracts and that she engaged in "intentional acts designed to induce a breach or disruption of the contractual relationship." Other than threadbare recitals of some of the elements of this cause of action, Appellants do not allege that Breed knew of their contracts with Clear Channel or Outfront, or that any of Breed's actions were intentionally designed to disrupt Appellants' contractual relationships with those companies. Indeed, the only specific action Appellants allege that Breed took was speaking critically about one of the billboards during a television interview. It is not possible to infer from that allegation that Breed's aim was to interfere with any of Appellants' contractual relationships. Consequently, Appellants failed to satisfy their burden of showing a sufficient probability of success on the merits of their tort claims against Breed, and those claims were properly struck.
The state action analysis is indeed consistent with the circuit court precedents (see this post). The interference with contract analysis strikes me as odd: Surely someone criticizing a billboard must be aware that the billboard was up under a contract, and it at least seems plausible that criticizing a billboard is intended to cause a "disruption" of a contractual relationship (even if not a breach), by being intended to urge the billboard company to remove it. Nonetheless, the claim should fail for another reason: Under California law, intentional interference with business relations (short of intentional inducement of an actual breach) is generally actionable only if it's otherwise unlawful (e.g., involves a threat of violence or some other illegal conduct).
Here's the factual backstory about the content of the billboards, from the decision below, though the content isn't legally relevant:
October 2019, plaintiffs Ellen Lee Zhou and the Asian American Freedom Political Action Committee ("AAFPAC") (collectively, "plaintiffs") posted two billboard advertisements in support of Zhou's campaign for mayor of the City and County of San Francisco….
One of AAFPAC's billboards showed Breed driving a red bus with the text "Werewolves of London Tours" near cars with smashed windows. Additional text read, "Vote Nov. 5 for Super Mayor Ellen Lee Zhou!"
Clear Channel and OutFront posted the billboards in October 2019. Soon after, Breed and her allies "began a concerted effort" to pressure Clear Channel and OutFront to remove the billboards by denouncing them as offensive, racist, and divisive. Breed's campaign publicized an October 21, 2019 press conference in front of the OutFront billboard, although Breed did not attend it. Those present, including State Assemblyman David Chiu and members of the Board of Supervisors, denounced the content of the billboard and called for its removal. News outlets reported various individuals describing the contents of the billboard as racist, misogynistic, and sexist, and opining that it had no place in San Francisco. Breed gave a media interview in which she said, "'[The billboard] is hurtful, it's disrespectful and it is no place [sic], I think in San Francisco for that kind of divisiveness.'" …
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