5/28/26 Lively v. Wayfarer - Judge Liman wants a tiny bit more before ending the 47.1 debate

Added: 2026-05-30

[00:00:00]Yes, you've all heard by now that there is an order in the Lively versus Wayfair case, but it's just a couple of paragraphs long and it's directing the parties to a very, very specific ask.

[00:00:15]Remember when the judge issued that oneline order saying that I'm good on briefing for the time being? Well, the time has come and he now wants very, very specific briefing on the 47.1 issue. First, he tells the parties something very important. He directs them to make an assumption in the arguments that they need to be making.

[00:00:38]He's saying assuming without deciding, so he hasn't decided on this yet means he's mulling this question over. And the question that he's mulling over is that the application by a prevailing defendant for relief under California Civil Code section 47.1B may be made pursuant to the Federal Rule of Civil Procedure 54. The last time he asked a question like that making the parties assume something that he hadn't yet decided on, it had to do with the enforcability of the ALA. and he raised it at the January hearing and he harped on it. He had the parties argue about it and guess what? A third of that dispositive motion hearing was dedicated to the contracts. So this first issue is quite important for him. So what is rule 54 of the federal rules of civil procedure? Rule 54 is about judgment and costs. It is the legal mechanism in federal court for you to obtain fees and costs and specifically it defines what judgments are and what costs and fees are permitted following judgments. And remember this question about judgments came up when the New York Times showed up and said we need you to enter entry of final judgment. That is a procedural mechanism that ends claims that kicks off the right under rule 54 to seek fees and costs. And at that time, the judge says, "No, we're not at final entry of judgment stage. Hold your horses."

[00:02:22]So what that tells me is that it is possible that in the judge's view there is no final judgment in this case because the case settled before there was an entry of final judgment. And since there was no final judgment, there may not be a procedural mechanism under rule 54 to bring this statutory feeshifting motion. Because remember, while 47.1 the California statute governs the entitlement, it's the federal rules that govern the mechanism for the costs and fees because we are in federal court after all.

[00:03:06]Anyway, he says, assume that they're allowed to make this motion under rule 54. For purposes of the things that I want you to discuss, assume that that's the case. He then asked what I think is about four different questions for them to address. And the first one is which party bears the burden of proof of showing that the communication is privileged under section 47.1A.

[00:03:34]Well, surely the person invoking the privilege should be the one to bear the burden of proving that they are entitled to such privilege. I really can't see any case saying any differently, but this is where there might be a difference. He says, including whether the burden differs depending on whether the application is for attorney's fees alone or also for trouble and punitive damages. Here's where it gets a little bit tricky. 47.1 says if you're the prevailing defendant in a defamation case based off of this privilege, then you're entitled to up to and including all of these things, attorney's fees and costs, tribal damages, and punitive damages under section 3294.

[00:04:28]In order to get punitive damages in California, you need to prove that the other side acted with malice.

[00:04:39]Technically, malice, oppression, or fraud. But you need to prove either malice, oppression, or fraud to be entitled to punitive damages under that section. That means that they need to prove that the people who brought the defamation lawsuit, the wayfairer parties, acted in a way intending to cause harm or as in a despicable way.

[00:05:09]This is a pretty high standard under the law. So obviously it wouldn't be up to the wfare parties. The burden wouldn't be on the wayfair parties to prove that they did not act with malice. The burden would be on Lively to prove that the Wayfair parties acted with malice to entitle her to the punitive damages under section 3294.

[00:05:37]And with respect to treble damages, treble is tripling the actual damages incurred as a result of the harmed conduct. So clearly that is also something that the plaintiff needs to prove in order for the court to triple that amount. So the judge wants them to address whose burden is it in all of these scenarios and also tell me about if the burden differs if you're trying to bring these fees and costs through rule 54 as discussed above. And he says that the parties may also address how the burden may be discharged. He does not give them a very long rope though. He wants by May 31st at 5:00 p.m. each side to submit a single spaced letter of no more than two pages with no footnotes. Seen a lot of footnotes here in this case limited to listing the cases that the party would like the court to review with quoting or explanatory parentheticals. And then on Monday, he's going to give each side half an hour to argue their positions.

[00:06:55]on just these questions.

[00:06:59]I think Lively has a entry of judgment problem.

[00:07:04]I think rule 54 might prevent her from being able to seek fees under 47.1.

[00:07:12]I also still think since my video I made last week about 47.1 that the fact that the dismissal was not made on the grounds of this particular privilege is a problem for Lively. I went back to see if there are any new decisions about that involve 47.1. And lo and behold, in March of 2026, there was one in the California Central District. A federal case. It actually involved people also in the industry. This guy named Evans who was a television producer who got into a relationship with some influencer model Walker. Long story short, relationship falls apart. There's nude photos, etc., etc., and lawsuits.

[00:08:03]Importantly, Evans accuses Walker of using social media after their relationship deteriorated to make accusations of sexual misconduct against him. He says that the accusations are false and that she only made them to harm his reputation. So Walker files an anti-slap motion against Evan, saying that this lawsuit is infringing on my First Amendment rights and with especially with respect to the copyright claims and the defamation claims. And so the court reviews the the copyright claims and says this is dismissed with prejudice. There's no copyright claim.

[00:08:48]Well, she says that under the anti-SLAP laws, I'm entitled to attorney's fees and also I'm entitled to attorney's fees under 47.1.

[00:08:59]But the court didn't dismiss the copyright claims because of the anti-slap grounds. The court dismissed the copyright claims because they failed to state a claim. And so the court says that because it didn't rule on the grounds of anti-slap or 47.1 Walker is not entitled to fees. End of story because in this order that judge says clerk enter this as the final order entry of judgment. So it goes back to my point. If the decision to dismiss was not made on the basis of the privilege that 47.1 creates, what basis does she have in seeking fees under that statute?