On February 22, 2012, O'Neal and the Beaverton Grace Bible Church filed a complaint in the Circuit Court of the State of Oregon for Washington County against Julie Anne Smith, her daughter, and two other blog commentators (the Stephens), alleging defamation and requesting $500,000 in damages arising out of critical comments on the Church's Google reviews page and Smith's blog.

According to the complaint and news sources, Julie Anne Smith and her family were congregants at Beaverton Grace Bible Church for several years when one of the church's employees was dismissed in late 2008. The Smiths met with Pastor O'Neal to express their concerns about this situation and were later allegedly instructed to recant these concerns. The Smiths did not do so and stopped attending church services.

Later, after Oregon police began investigated allegations of child molestation against the Pastor and church, Pastor O'Neal "excommunicated" the Smiths. In response, starting in early 2009, Julie Anne Smith posted her concerns on the Google review page for Beaverton Grace Bible Church, and when these were taken down, she began a blog called Beaverton Grace Bible Church Survivors. Her comments and blog expressed opinion that the church was a "creepy" and unsafe environment and condemned O'Neal for his "extra-biblical legalistic teaching[s]" and allowing a known sex offender into the church. This blog received many similar comments, such as those by the Stephens.

In response, O'Neal and the Beaverton Grace Bible Church filed the complaint in this action. On April 26, 2012, the defendants filed a special motion to strike the defamation claim under Oregon's anti-SLAPP statute. This motion also asserted as defenses that: the speech was comprised of protected opinion; the church and Pastor O'Neal are public figures and there is no evidence of actual malice; and the church autonomy doctrine applies.

On the same day, Beaverton Grace Bible Church and O'Neal filed an amended complaint. An additional defendant, Meaghan Varela, was added for her comments on Smith's blog, and more allegedly defamatory speech on the blog was identified. Accordingly, on May 1, 2012, the defendants filed a second special motion to strike in response to the additional allegations of the amended complaint, as a supplement to their first motion. On May 14, Beaverton Grace Bible Curch and O'Neal opposed the motions to strike and filed a declaration by a congregant to demonstrate that the allegation of allowing a known sex offender access to the church was a false statement.

Update:

On July 23, 2012, the court granted the defendants' special motion to strike. The court found that the statements made were on "issues of public interest," that several of the statements were not provable assertions of fact, and that the balance were pure opinion. The court awarded $16,750 in attorney's fees to defendants  Kathy Stephens and Jason Stephens, and invited defendants Julie Ann Smith, Hannah Smith, and Meaghan Varela to submit statements for fees.

Substantive Proceedings

The Art of Living Foundation is an international nonprofit organization that, according to its website, is "engaged in stress-management and service initiatives." Two former followers, Skywalker and Klim, published anonymous blogs (entitled "Leaving the Art of Living" and "Beyond the Art of Living") criticizing the Art of Living's practices and their leader, Sri Sri Ravi Shankar. In addition to their critiques, they also provide excerpts from the Art of Living's teaching manuals and other materials (normally provided to members in courses for a fee).

On August 14, 2010, Skywalker and Klim received a demand from Art of Living (from its headquarters in India) to take down this material. The branch of Art of Living in the United States (based in California) also filed a complaint on November 5, 2010, in the U.S. District Court for the Northern District of California. Art of Living alleged copyright infringement under federal law for the blogs' publication of portions of the "Breath Water Sound Manual." In addition, Art of Living alleged misappropriation of trade secrets, defamation, and trade libel under California law, based on the aforementioned publication and the Does' critical statements about the organization.

On January 31, 2011, the Does filed a motion to dismiss the defamation and trade libel claims for failure to state a claim. They also filed a special motion to strike the defamation, trade libel, and trade secrets claims under California's anti-SLAPP statute. Art of Living filed both an opposition to the motion to dismiss and an opposition to the motion to strike on March 17, 2011, to which the Does replied (reply re: motion to dismiss; reply re: motion to strike) on April 6, 2011. After a hearing in May, on June 15, 2011, U.S. District Judge Koh dismissed the defamation and trade libel claims and denied (without prejudice) the motion to strike. Judge Koh found that the statements at issue were opinions rather than assertions of fact, resolving the defamation claim, and that Art of Living did not sufficiently allege harm or damages for the trade libel claim. Judge Koh also held that discovery on the trade secrets claim could not proceed until Art of Living identified the trade secrets with reasonable particularity.

On July 14, 2011, Art of Living proceeded to amend their complaint in accordance with the June 15th order, removing the dismissed claims from their complaint. Art of Living also provided further detail and content identification in regards to the remaining copyright infringement and trade secrets claims. The Does answered the amended complaint on July 28, 2011.

The Does then filed a second special motion to strike on September 12, 2011 (with the redacted version entering the docket on January 9, 2012), this time directed at the remaining trade secret claim. This motion was opposed by Art of Living on September 29, 2011. Additionally, on September 27, 2011, the Does filed a motion for summary judgment on the copyright infringement claims. Art of Living filed an opposition to this motion on October 11, 2011, which the Does replied to on October 24, 2011. 

In an order on May 1, 2012, Judge Koh granted summary judgment on the copyright infringement claim. Judge Koh found that Klim was entitled to summary judgment based on noninfringement, and that Art of Living did not provide enough support for its claim of authorship of the manual to pursue a copyright infringement claim against Skywalker because the copyright registration certificate was obtained after the litigation began). The district court also granted Klim's motion to strike the trade secrets misappropriation claim while denying the motion to strike in regards to Skywalker. While Skywalker conceded that there was at least some overlap between his blog postings and the materials Art of Living designated as trade secrets, Art of Living presented no evidence that Klim misappropriated any of these materials.

Anonymity in Art of Living v. Does

Throughout the proceedings described above, there was an ongoing issue with respect to the defendants' ability to proceed anonymously.

On November 9, 2010, Art of Living filed a motion for leave to take expedited discovery. Pursuant to an ex parte order by Magistrate Judge Beeler, on December 20, 2010, Art of Living subpoenaed Google and Wordpress to reveal the identities of bloggers Skywalker and Klim. Not long after being notified of this by Google, the Does filed a motion to quash the subpoena. In response, Art of Living filed an opposition on March 22, 2011, and the Does replied on April 28, 2011. On August 10, 2011, Magistrate Judge Lloyd denied the motion to quash in regards to Skywalker's claim while granting it for Klim, finding that the copyright claim was a sufficient basis for permitting identification of Skywalker.

In response, on August 24, 2011, Skywalker filed a motion for relief from the order of the Magistrate Judge regarding the motion to quash. On August 31, 2011, Public Citizen, joined by the Electronic Frontier Foundation and the ACLU, submitted an amicus brief. This brief urged the court to apply the balancing test adopted in Dendrite Int'l v. Does, despite the copyright claim being considered in the case. Art of Living's opposition to the motion for relief was filed on September 16, 2011, and Skywalker replied on September 30, 2011.

On November 9, 2011, Judge Koh granted the motion, finding that Skywalker's First Amendment right to anonymous speech outweighed Art of Living's need for discovery at this time. Judge Koh applied the Highfields Capital two-part test (which relied heavily on Dendrite) for determining whether to allow discovery seeking the identity of an anonymous defendant: "(1) The plaintiff must produce competent evidence supporting a finding of each fact that is essential to a given cause of action; and (2) if the plaintiff makes a sufficient evidentiary showing, the court must compare the magnitude of the harms that would be caused to the competing interests by a ruling in favor of the plaintiff and by a ruling in favor of the defendant."

In a case management conference and corresponding minute order on May 9, 2012, Judge Koh again denied all of Art of Living's motions to disclose Skywalker's identity. By also refusing to extend discovery a setting the trial date and length, these rulings potentially allowed Skywalker to defend at trial anonymously.

Related Case and Settlement

On June 8, 2012, Judge Koh granted Art of Living's motion to relate Art of Living Foundation v. Eng-An Chou (Docket no. 5:12-CV-02748-LHK) to this case. Chou involves Art of Living's claim that Eng-An Chou breached her contracts with Art of Living by disclosing some of the organization's confidential texts to Skywalker for posting on his blog.

The next week, the cases were referred to Judge Joseph C. Spero for a Magistrate Judge Settlement Conference. The conference was held on June 12, 2012 and a settlement was reportedly reached. As part of the settlement agreement, Skywalker and Klim published a joint statement informing readers of the settlement and would proceed to freeze their blogs on June 19, 2012. The joint statement noted that there are no restrictions on the Does to create new blogs, and that no identity had or would be disclosed in relation to this litigation and settlement. Art of Living also agreed to drop the lawsuit with prejudice (also dropping the separate suit against Chou) and to pay Skywalker and Klim's attorney's fees.