Appellate judge issues decision on Boulder defamation lawsuit

Aug. 4—A judge on the Colorado Court of Appeals issued a decision Thursday on a high-profile defamation lawsuit that parties have said may have consequences for free speech.

Steven Rosenblum filed the original 2021 lawsuit in Boulder District Court, claiming that a number of local political organizers conspired to defame him while he campaigned for a seat on Boulder City Council that fall.

Attorneys on behalf of the organizers have argued the lawsuit was meant to silence Rosenblum's adversaries, and they filed a special motion to dismiss the case based on a 2019 Colorado law targeting strategic lawsuits against public participation, or SLAPP suits. However, the Boulder District Court denied the motion to dismiss the lawsuit, and the case went to the state Court of Appeals in March 2022.

In Thursday's opinion, Judge Terry Fox ruled that Rosenblum had established a "reasonable probability of success at trial" on his claims of misappropriation and defamation against Eric Budd, one of the organizers, but had failed to do so for his third claim of civil conspiracy against Budd and other organizers.

According to court filings, Budd created a fake social media account for Rosenblum and used it to share a link to a blog that at the time falsely attributed a series of Reddit posts to Rosenblum.

Importantly, Fox wrote that Rosenblum could be able to prove that Budd acted with "actual malice," in part because Budd "had reason to know" that the link to the blog contained false information. In Colorado, plaintiffs bear the burden of proof for establishing actual malice — which applies to the act of spreading information while knowing it is false or having reckless disregard for the truth.

However, the opinion remanded the case to the district court to determine whether Budd is a "partially prevailing" defendant. If he is, he "must be considered a prevailing party for purposes of attorney fees and costs unless the results of the partially successful motion were so insignificant that the defendant did not achieve any practical benefit from bringing the motion."

Additionally, Fox stated that Rosenblum had failed to establish a reasonable probability of winning his claims against any of the other defendants named in the lawsuit — Katie Farnan, Ryan Welsh, Mark Van Akkeren, Sarah Dawn Haynes and the Boulder Progressives organization — and asked that the district court award them "reasonable appellate attorney fees and costs."

In the opinion, Fox also warned of the potential consequences such lawsuits can have on free speech.

"Lawsuits premised on the concerted efforts of a political opponent present the exact type of litigation that could have a 'chilling effect on the constitutionally protected right(s) of free speech' and association," she wrote.

Judges Craig Welling and W. Eric Kuhn concurred with the opinion.

Boulder Progressives issued a statement Thursday in praise of the ruling. According to a news release, the organization stated the Court of Appeals had "affirmed the importance of free speech and open elections when they dismissed the 2021 claim made against several Boulder residents who exercised their right to participate in the discourse surrounding a Boulder City Council election."

"We are gratified that the anti-SLAPP law is working as intended, and the principle of robust debate on public issues has prevailed," Boulder Progressives executive leaders stated in the release.

Katie Farnan, an organizer named in the lawsuit, said she was glad to see the appeals court treat the case as a First Amendment issue.

"I'm proud to have stood up for (protecting the First Amendment), and I encourage us to remember that political speech doesn't have to be soft, political speech doesn't have to be mild. It just needs to be rooted in the truth," Farnan wrote in an email. "I think that the wasted time and threat of legal action against lawful activities in the course of an election did chill speech in the community around (important) issues, and we need to continue to have those conversations now."

Budd told the Daily Camera the ruling was a "massive win for free speech and working on elections." He conceded that he had hoped for a full dismissal of the claims in the lawsuit, but said he believes in the importance of sharing relevant information about candidates for elected office.

"It's important to me that we're doing work that really vets candidates, that makes sure that important things about candidates are available to the general public. And I continue to fight for that," said Budd. "And the information about someone's opinions on homelessness, about the decisions on policing, and how people are treated in this community, are incredibly important in determining our city leadership."

But Stan Garnett, a lawyer for Rosenblum and the former district attorney of Boulder County, saw the ruling as a "very strong endorsement" of the misappropriation and defamation claims against Budd, particularly the findings that supported Rosenblum's allegations of actual malice, which he said were "at the heart" of his client's concerns.

"To conclude that Mr. Rosenblum has sufficient evidence and has a reasonable likelihood of prevailing at trial ... and also found, as necessary for defamation, that he would be able to establish malice on Eric Budd's part ... that part of the opinion, which is the most important part of the opinion in terms of understanding what the lawsuit is about, was very strong for Steve. And we were very satisfied with that," Garnett said. "The Court of Appeals clearly spent a lot of time going through the record and the allegations and came out and said, 'Yes, these are very legitimate claims from Steve against Eric Budd.'"

Rosenblum was traveling at the time of publication of this story and could not immediately be reached for comment, but Garnett said his client was "very pleased with how the decision lays out in great detail how serious the allegations are against Mr. Budd."

Garnett said if the case is not appealed to the Colorado Supreme Court, the case will return to Boulder District Court, and a trial date will likely be set in 2024.