On Friday morning, a Santa Barbara County Superior Court judge dismissed the charges of fraud and unfair business practices brought against the Phi Gamma Delta international fraternity (FIJI) as part of a lawsuit filed in September 2003 by a former pledge of the fraternity’s Santa Barbara chapter.
The hearing gave the attorneys for both parties a chance to plead their cases before Judge James W. Brown, who posted a tentative ruling earlier in the week in favor of granting the defendant’s motion to dismiss the two allegations. Attorney Randall Haimovici represented FIJI at the hearing and supported Brown’s tentative ruling. Attorney Alex Grab, who represented plaintiff Jason Belsky and his family, faced the challenge of trying to convince Brown to overturn his decision.
In September, the Belskys filed a list of 10 complaints, most of which involved incidents of alleged negligence and abusive hazing that occurred during Belsky’s time as a pledge. To justify the claims of fraud and unfair business practices, the plaintiffs cited a letter sent to the parents of pledges by the fraternity that said hazing is not a part of the fraternity or its development process. Because the letter also contained a request for money in the form of initiation fees, the plaintiffs said the letter was a fraudulent and misleading document.
Brown’s tentative ruling said the letter in question is protected as an item of free speech under the First Amendment. Grab said the ruling went against precedent and cited several cases in which deliberately misleading statements were not protected by the right to free speech.
“That’s simply contrary to the United States Supreme Court’s holdings,” Grab said. “There’s no First Amendment right in false statements.”
In Brown’s tentative ruling, he said the letter contains information about hazing — information of general public interest — and cannot be seen as fraudulent or misleading. Grab said the First Amendment protects speech about matters of public importance, but “specific claims about the speaker’s own business are not protected,” and the letter’s description of FIJI’s hazing policy was one such claim.
“The defense cannot immunize speech by including matters of public interest,” Grab said. “Here, obviously, there was an intent to influence parents.”
Grab said he would not consider the letter to be fraudulent if the fraternity had separated the claims about hazing from the request for money. However, the presence of the allegedly false claims and the monetary request in the same letter constituted fraud, Grab said.
“It would not have been impossible to send out a separate letter about hazing and one asking for money,” Grab said.
Haimovici said he was pleased with Brown’s tentative ruling and that he and his client support it fully. The cases Grab cited for precedent are not similar enough to this case for their rulings to apply, Haimovici said.
“The cases [the plaintiffs] have cited deal with products,” Haimovici said. “In this case, the letter sent out dealt with hazing.”
Brown said he agreed with Haimovici’s case and that the tentative ruling would stand.
After the hearing, Haimovici said Brown is known for his extensive research on cases prior to the hearings and does not overturn his tentative rulings often.
“This is a judge who does a lot of work at the paper stage,” Haimovici said.
Grab said he was not surprised the judge did not change his mind.
“After seeing him not overturn the last case after 45 minutes, I didn’t really expect him to overturn our case,” Grab said.
However, Grab said if the Belskys wish to appeal the decision — which they are legally entitled to do — he is confident they will win.
“I think we have a good shot at it being overturned on appeal,” Grab said.
Haimovici said the law demands that plaintiffs show “a reasonable chance” they can prove their claims are valid in order to overturn a ruling and that the Belskys have not and most likely will not be able to do so.
“They’re not going to be able to meet that standard because there’s problems with their case,” Haimovici said.