Planet Aid, Inc. v. Reveal

44 F.4th 918

PLANET AID, INC., a Massachusetts Corporation which has its principal place of business in Howard County, Maryland; Lisbeth Thomsen, an alien and permanent resident of Chilangoma, Malawi, Plaintiffs-Appellants,

v.REVEAL; Center for Investigative Reporting; Matt Smith ; Amy Walters, Defendants-Appellees.

No. 21-15690

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 14, 2022 San Francisco, California

Filed August 11, 2022

Samuel Rosenthal (argued), Nelson Mullins LLP, Washington, D.C.; James M. Wagstaffe and Michael von Loewenfeldt, Wagstaffe von Loewenfeldt Busch & Radwick LLP, San Francisco, California; for Plaintiffs-Appellants.

Thomas R. Burke (argued), Davis Wright Tremaine LLP, San Francisco, California; Ambike K. Doran, Davis Wright Tremaine LLP, Seattle, Washington; Brendan Charney and Andrew G. Row, Davis Wright Tremaine LLP, Los Angeles, California; Simon J. Frankel, Alexa Hansen, Alison Wall, Annie Shi, and Miriam Arghavani, Covington & Burling LLP, San Francisco, California; Eric Chung, Covington & Burling LLP, Washington, D.C.; for Defendants-Appellees.

Deborah J. Dewart, Hubert, North Carolina, for Amicus Curiae Liberty, Life, and Law Foundation.

Elizabeth M. Locke, Joseph R. Oliveri, and Daniel D. Mauler, Clare Locke LLP, Alexandria, Virginia, for Amicus Curiae Clare Locke LLP.

Theodore J. Boutrous Jr. and Michael H. Dore, Gibson Dunn & Crutcher LLP, Los Angeles, California; Katie Townsend, Sarah S. Matthews, and Charles Hogle, Reporters Committee for Freedom of the Press, Washington, D.C.; for Amici Curiae Reporters Committee for Freedom of the Press and 32 Media Organizations.

Before: Sidney R. Thomas, Ronald M. Gould, and Carlos T. Bea, Circuit Judges.

S.R. THOMAS, Circuit Judge:

In this appeal we must determine whether a charity and the director of a charity are limited-purpose public figures under the First Amendment. Reporters with the Center for Investigative Reporting published stories alleging misuse of funds by two charitable organizations, Planet Aid, Inc. ("Planet Aid") and Development Aid from People to People Malawi ("DAPP Malawi"). In response, Planet Aid and the director of DAPP Malawi, Lisbeth Thomsen, filed a defamation suit. The district court granted the Reporters' motion to strike the complaint under California's anti-SLAPP statute, correctly finding that Planet Aid and Thomsen are limited-purpose public figures and that the reporters did not act with "actual malice" within the meaning of New York Times Company v. Sullivan , 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). We affirm.

I

The Center for Investigative Reporting ("CIR") is a California-based, nonprofit, investigative news organization. CIR publishes its reporting on various platforms, including its news website Reveal (www.revealnews.org), national radio show, and podcast. Matt Smith and Amy Walters were reporters with CIR. Between 2014 and 2017, CIR, Smith, and Walters (collectively, "CIR" or the "Reporters") investigated and published a series of articles and podcasts reporting on the misuse of charitable funds by Planet Aid and its affiliate organization DAPP Malawi.

A

Planet Aid is a nonprofit charitable organization headquartered in Maryland with the stated mission of helping impoverished populations throughout the world. Planet Aid is recognized by the U.S. Internal Revenue Service ("IRS") as a 501(c)(3) tax-exempt charity. It resells used clothing donated by the public, obtains government grants, and solicits corporate donations to generate funds. Since its inception in 1997, Planet Aid claims to have provided more than $100 million to support projects on three continents in the areas of education, teacher training, nutrition, and agricultural and economic development.

Planet Aid's fundraising efforts are highly successful and recognizable. It fundraises by going door to door to solicit donations as well as setting up clothing donation bins that have become nearly ubiquitous across the United States. In partnership with schools, business groups, religious institutions, nonprofits, and various organizations across the country, Planet Aid placed over 20,000 donation bins nationwide. Its signature, bright-yellow bins are present in 20 states and have achieved a degree of celebrity in popular culture. For example, the bins were featured in an episode of the popular television series "The Big Bang Theory," which Planet Aid eagerly promoted on its social media pages.

Planet Aid regularly engages with the press and actively cultivates a public image. It issues frequent press releases to generate attention regarding its charitable programs and activities. For instance, Planet Aid issued numerous press releases over the years to advertise the environmental benefits of its efforts to collect and resell donated clothing. Other examples of Planet Aid's public self-promotion abound. In March of 2014, Planet Aid distributed press releases regarding a teacher training program it helped fund in Malawi. In June of 2016, it issued press releases regarding dignitaries' visits to a nutritional program it was running for schoolchildren in Mozambique. It has hosted large galas to celebrate its charitable successes and promoted those galas to the press. Planet Aid also publicizes itself through social media. It has a YouTube page featuring videos about its charitable activities, some of which have thousands of views. Additionally, it regularly posts on Facebook and Twitter to its thousands of followers.

From its inception, Planet Aid has drawn public attention and comment. For decades, the global press has reported on its relationship with a controversial web of charitable organizations accused of misusing funds and its association with a Danish cult. In 1993, a few years before Planet Aid was incorporated, the Edmonton Journal reported that "an international organization that specializes in collecting used clothes for southern Africa," was "attracting criticism from Denmark to the Arctic Circle" because many "Europeans who donate their old [clothes] don't know the garments end up being sold at market prices in Africa—with much of the profit filtered into what seem less than altruistic causes." This organization, known as "Humana" was reportedly affiliated with the Development Aid People to People ("DAPP") network. According to the article, "[t]hrough a complex web of financial interests, the Humana/DAPP network runs a financial system out of the Cayman Islands" that includes "holding companies," "Caribbean fruit plantations," and "a yacht dealership." The article further alleged that Humana and DAPP began as a group of radical Danish school teachers in the early 1970s, called "Tvind."

Then, according to a Danish newspaper, "after the Danish government fund slammed the door on subsidies," Tvind "beg[an] an unprecedented, mammoth expansion drive in the USA and Canada to raise millions for its international activities," including "found[ing] the organization Planet Aid." In 2001, Tvind's founder, Mogens Amdi Petersen, was prosecuted by Danish authorities for "using his control of Tvind and its related [organizations] to divert funds that were supposedly intended for charitable and other public purposes."

Multiple major news organizations in the United States and overseas reported on the trial and raised concerns about Planet Aid's connection to Tvind and its use of charitable funds. In 2002, the Boston Globe linked Planet Aid to Petersen, who faced "charges of tax fraud and embezzlement of millions of dollars from a vast international network of charities," and reported that "only about 6 percent of the money [Planet Aid] raises is spent on charity." Several other publications reported that the American Institute of Philanthropy and the Better Business Bureau were critical of Planet Aid's use of funds. These concerns reverberated from The Washington Post (May 2003 article), to the Chicago Tribune (Feb. 2004 and May 2011 articles), to the Los Angeles Times (Aug. 2015 article).¹ Several international publications also covered the controversy.

B

Lisbeth Thomsen is the director of DAPP Malawi, a nonprofit charitable organization based in Malawi. Thomsen has worked in Malawi for nearly three decades and has worked specifically for DAPP Malawi for over two decades. Thomsen helped lead the organization's poverty reduction and humanitarian efforts, establishing pre-schools, teacher training colleges, HIV/AIDs counseling centers, door-to-door educational campaigns, and other initiatives.

As the director of DAPP Malawi, Thomsen was its spokesperson. When DAPP Malawi opened a school or unveiled a new charitable program, she spoke at public gatherings before local officials and community members to promote the initiative. Thomsen regularly spoke to the press to generate attention regarding the successes of DAPP Malawi's programs. She was featured regularly on DAPP Malawi's Facebook and Twitter pages and appeared in promotional YouTube videos about DAPP Malawi's work. Thomsen employed a public relations team, which helped her seek out positive press coverage and public appearances, and develop responses to negative publicity.

Like Planet Aid, DAPP Malawi was long embroiled in the Tvind controversy. The press repeatedly linked DAPP Malawi to the Danish cult leader who was prosecuted for charity fraud. Additionally, several articles in Malawi newspapers raised concerns or made allegations about DAPP Malawi's misuse of charitable funds under the leadership of Lisbeth Thomsen. In 2002, the Malawi News linked Tvind, Humana, and DAPP Malawi, reporting allegations that "Dapp Malawi uses its second hand clothes shops to raise funds which are later transferred back to Denmark through ... a dubious scholarship scheme." In 2003, The Chronicle Newspaper reported that "[i]n Malawi, government is now probing activities of DAPP Malawi, following ... [accusations that] scholarships and other funds meant for Malawian students allegedly...