Yusim, Cassidy, Stein & Hanger, Robert T. Hanger, Alice Huston, Roger Bentley, Beverly Hills, Paul P. Selvin and Selvin & Weiner, Los Angeles, for petitioners.

Stephen V. Bomse, Rebecca S. Eisenberg, Katherine H. Crocker, Heller, Ehrman, White & McAuliffe, Margaret C. Crosby, Alan L. Schlosser, Amitai Schwartz, San Francisco, and Fred Okrand, Los Angeles, as amici curiae on behalf of petitioners.

No appearance for respondent.

Levy & Norminton, Charles M. Levy and Thomas M. Norminton, Beverly Hills, for real party in interest.

NEWMAN, Justice.

The complaint here alleges libel and slander during defendants' (petitioners') successful campaign for repeal of an ordinance that would have enabled plaintiff (real party in interest) to build a large condominium project in Beverly Hills. Our reading of the complaint persuades us that the publications in question could not reasonably be found libelous and that plaintiff's pleading of a conspiracy to slander is deficient.

The lawsuit was begun in September 1979. A first amended complaint names Betty Harris, Joann Ruden, Erwin Okun, and Does 1 through 1,000 as defendants and alleges 10 causes of action against various combinations of those defendants. Demurrers by Harris, Ruden, and Okun were sustained as to the first, seventh, eighth, ninth, and tenth causes, overruled as to the second, third, fifth, and sixth causes, and ordered off calendar as to the fourth cause (because it names only Doe defendants).

In response to the present petitions, we issued alternative writs of mandate inviting plaintiff and the trial court to show cause why the demurrers to the second, third, fifth, and sixth causes of action should not be sustained.

The first cause of action is not directly before us; but its introductory paragraphs, setting out background facts, are incorporated into each of the four causes whose sufficiency we now weigh. The paragraphs allege:

Plaintiff is a limited partnership that purchases, manages, develops, and sells real property. In 1977 it bought 10 acres of Beverly Hills property with a view to building condominiums. The property, then under a building moratorium pending determination of zoning, adjoined city-owned parcels. Plaintiff had discussed with city officials the possibility of a land exchange so that plaintiff and the city each would own contiguous land. The discussions concluded successfully on November 28, 1978, when the city council agreed to the land exchange and adopted a zoning ordinance allowing plaintiff to construct condominiums on all its newly acquired property.

To prevent construction, defendants circulated and then filed a petition to allow the electorate to reject or accept the ordinance. Consequently the council placed it on the ballot for an election held March 9, 1979. It was rejected and thus repealed. Defendants were "motivated by ill will toward (plaintiff)" and "campaigned against the passage of Proposition B in order to stop (plaintiff's) condominium project, among other ways, by defaming (plaintiff). Said defendants variously and falsely accused (plaintiff) of corrupt and collusive activities in connection with City officials."

The second cause alleges that Harris and Does 101 through 200 wrote this letter to the editor of the Los Angeles Times, wherein it was published on January 28, 1979:

"Setting the Record Straight

"The article regarding a controversial land swap between the Beverly Hills City Council and a developer of luxury condominiums ('Land Swap Stirs Up Beverly Hills' by Sam Kaplan, Dec. 26) missed the point entirely.

"To set the record straight:

"While the area in contention adjacent to Beverly Hills' civic center is known as the industrial area, it also houses the city's vital municipal services facilities. It is the site of the city's refuse transfer station, vehicle maintenance garages and all the other indispensable operations that make a city function. It is also the site of a water treatment plant that the city council abandoned in 1976.

"This action was followed by the council's abandoning the city's own water wells in the midst of the recent drought. It was this incredible move that caused a number of citizens to become suspicious of the council's motives. Beverly Hills residents were thus forced to become completely dependent upon one very expensive source of water, that supplied by the Metropolitan Water District of Southern California. Even the MWD's general manager advised the city against this decision.

"Nevertheless, this was done despite the fact that in 1974 the voters of Beverly Hills had passed, by a two-thirds majority, a $3.75 million bond issue to refurbish the city's water wells and treatment facilities. The only council member opposed to the bond issue and retention of the city's wells was Richard Stone, an attorney.

"Mysteriously, one week after the voters approved the refurbishing of their water system, the city announced that its cost projections to revitalize the wells were $5 million short. Amazingly, a year later the claim went up to $12 million more than the voter-approved bonds. But, without asking the voters again, in December, 1976, the council closed down the wells and sold off the land on which they were located.

"Not until April 12, 1977, did Richard Stone, at that time the mayor of Beverly Hills, reveal that David Rowen, representing a developer, had become a client of Stone's. The abandoned treatment plant is now earmarked for the developers in a landswap deal."

Was the letter libelous? Clearly it permits a nondefamatory interpretation. The facts that in April 1977 plaintiff "had become a client of (council member) Stone" (who in 1974 had opposed retention of the city's wells), that in 1976 the wells and water treatment plant were abandoned, and that in 1979 the treatment-plant site was "earmarked for the developers (plaintiff) in a landswap deal" do not necessarily imply wrongdoing. There is no explicit statement that Stone had represented plaintiff for any substantial period before April 1977 or was improperly influenced by plaintiff in his handling of city affairs.

Nonetheless a writing's susceptibility to innocent meaning does not in itself preclude a finding that an ordinary reader would understand it in a libelous sense. (MacLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 546-551, 343 P.2d 36; see Forsher v. Bugliosi (1980) 26 Cal.3d 792, 803, 805, 163 Cal.Rptr. 628, 608 P.2d 716.) To show libelous meaning, plaintiff alleges by way of innuendo that the letter was understood to mean that plaintiff "conspired" with Stone to cause the city to abandon its wells so as to make the treatment plant obsolete and allow plaintiff to acquire the site "for private gain," and that plaintiff "conspired to commit, and did commit, the crimes of bribery and corruption." However, "it is not the purpose of an innuendo to 'beget an action', and the meaning of the language complained of may not be enlarged or extended thereby. (Citations.) In other words, it is the office of the innuendo to merely explain or interpret, without enlarging, the alleged libelous publication." (Bates v. Campbell (1931) 213 Cal. 438, 442-443, 2 P.2d 383.)

Here, plaintiff's innuendo allegations are not supported by the letter's words. The implications deprecatory to plaintiff are mere opinion, not libelous. "An essential element of libel ... is that the publication in question must contain a false statement of fact.... This requirement ... is constitutionally based. The reason for the rule, well stated by the high court, is that 'Under the First Amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas.' (Gertz v. Robert Welch, Inc. (1974) 418 U.S. 323, 339-340, 94 S.Ct. 2997, 41 L.Ed.2d 789, fn. omitted ....) (P) The critical determination of whether the allegedly defamatory statement constitutes fact or opinion is a question of law. (Citations.) The distinction frequently is a difficult one, and what constitutes a statement of fact in one context may be treated as a statement of opinion in another, in light of the nature and content of the communication taken as a whole. Thus, where potentially defamatory statements are published in a public debate, a heated labor dispute, or in another setting in which the audience may anticipate efforts by the parties to persuade others to their positions by use of epithets, fiery rhetoric or hyperbole, language which generally might be considered as statements of fact may well assume the character of statements of opinion." (Gregory v. McDonnell Douglas Corp. (1976) 17 Cal.3d 596, 600-601, 131 Cal.Rptr. 873, 552 P.2d 1169.)

Gregory also confirms that, short of accusations of crime or personal dishonesty, the First Amendment protects even sharp attacks on the character, motives, or moral qualifications of "a public officer or ... an active participant in a labor dispute." (Id., at p. 604, 131 Cal.Rptr. 873, 552 P.2d 1169.) There is an analogous leeway for criticism of an individual who voluntarily injects himself or herself into public controversy and so becomes a "public figure". (See Vegod Corp. v. American Broadcasting Companies, Inc. (1979) 25 Cal.3d 763, 767, 769, 160 Cal.Rptr. 97, 603 P.2d 14.) Plaintiff's participation here made it a public figure. (Greenbelt Pub. Assn. v. Bresler (1970) 398 U.S. 6, 8-9, 90 S.Ct. 1537, 26 L.Ed.2d 6 (developer seeking variances to build high-density housing "clearly fell within even the most restrictive definition of a 'public figure' ").)

By those standards the Harris letter is not defamatory. It does criticize abandonment of the wells and treatment plant as unwise, "incredible," a product of "suspicious" motives, and a flouting of the voters' wishes. It reports Councilman Stone's April 1977 revelation that he had become plaintiff's attorney but asserts no conduct by Stone other than his being the only council member to oppose the water-supply bond issue three years earlier. The implication that he and other council members were motivated by selfish interest rather than the public good is well within the bounds of protected political debate. (Scott v. McDonnell Douglas Corp. (1974) 37 Cal.App.3d 277, 289-291, 112 Cal.Rptr. 609.) A statement regarding (1) a public official's business, social, or political affiliations, and (2) how those affiliations seem reflected in decision-making hardly constitutes a libelous charge of bribery and corruption. A contrary ruling would inhibit a significant segment of the discourse vital in a democracy. (See Desert Sun Publishing Co. v. Superior Court (1979) 97 Cal.App.3d 49, 158 Cal.Rptr. 519; Sierra Breeze v. Superior Court (1978) 86 Cal.App.3d 102, 149 Cal.Rptr. 914.)

Plaintiff argues that the letter's title ("To Set the Record Straight") and the words "mysteriously" and "amazingly" in its next-to-last paragraph suggest that the writer knew of unstated improprieties between plaintiff and Stone. (See Rest.2d Torts, s 566 ("a statement in the form of an opinion ... is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion").) The letter's apparent aim, though, was to disclose whatever pertinent facts were known to the writer. "Mysteriously" and "amazingly" suggest that she did not have knowledge of underlying reasons for the council's actions, though the words also may imply an opinion that the reasons might be subject to severe criticism if revealed. Rather than implying unstated facts, the letter seems "cautiously phrased in terms of apparency." (Gregory, supra, 17 Cal.3d at p. 603, 131 Cal.Rptr. 873, 552 P.2d 1169; Information Control Corp. v. Genesis One Computer Corp. (9th Cir. 1980) 611 F.2d 781, 783 (California law).) [FN1]

[FN1] After oral argument, plaintiff formally requested that we take judicial notice of the answer to a petition for hearing arising out of a discovery proceeding in a separate libel suit by Stone based on the same letter. The stated purpose of the request is to call to our attention the answer's assertions that particular factual statements in the letter are false. The assertions add nothing to the complaint's allegations that the statements are false. Their falsity, if proved, would not make them defamatory. (Blackhawk Corp. v. Ewing (1979) 94 Cal.App.3d 640, 156 Cal.Rptr. 581.)