Factory Owner Fumes as Odor Suit Is Dismissed : Ruling: Judge tosses out slander claim, saying residents exercised free speech rights in complaining about smell allegedly coming from a nearby business.

Citing what she said was a clear instance of citizens exercising their free speech rights, a Superior Court judge dismissed a slander and conspiracy lawsuit Tuesday filed against artists who had complained about nauseating odors allegedly coming from a factory next to their Los Angeles lofts.

Also thrown out of court was an attempt by the California Fiberloft factory to gain access to confidential South Coast Air Quality Management District files for the names of those who had complained to the agency about the smell. The AQMD sought to keep its files secret.

In ruling for the artists who live in the Santa Fe Art Colony, between 24th and 25th streets near the Los Angeles River, Judge Lillian M. Stevens said: “This is not a difficult question. People who smell an obnoxious odor and go to the AQMD to complain are exercising their right of free speech.”

Mark Bidner, one of the owners of the adjacent factory, said he would appeal Stevens’ decision on his lawsuits against the artists and the AQMD. And though he insisted that his polyester-stuffing manufacturing is not the cause of the smell, Bidner suggested that the ruling might make him move his operation out of state, taking away about 100 jobs.

“If you can’t put an industrial plant in the most industrialized part of Los Angeles and California, where can you go?” he asked after the hearing. His factory, which produces polyester stuffing for garments and bedding, has been in its location since 1977. The 57-unit artists colony, with the help of a low-interest city loan, moved into a former robe-tailoring plant on the other side of a narrow alley eight years ago.

The American Civil Liberties Union Foundation of Southern California, which represented the artists, stressed that the Legislature last year granted protection from slander suits to citizens who alert authorities about possible health and safety violations.

“The law worked the way it was supposed to,” said attorney Michael J. Strumwasser, who handled the case for the ACLU. “This ruling prevented an economic bully from intimidating citizens from exercising their right to free speech.”

Over the past two months, AQMD inspectors have cited California Fiberloft three times for nuisance odors, charges that face administrative review. AQMD inspectors have visited the factory about 70 times over the past four years without the firm ever being convicted of a pollution violation, said Bidner, who alleged that the continuing complaints constitute harassment and cause costly interruptions of work.

“I believe it goes far beyond reasonable exercise of free speech,” Bidner, who is also an attorney, told the judge during the hearing.

But Stevens quickly admonished him, contrasting possible pollution complaints to the traditional limit on speech that recklessly endangers other people. “We are not talking here about yelling fire in a crowded theater,” the judge said firmly.

The ruling Tuesday did not deal with specifics of the alleged odor and its origins. Peter Mieras, AQMD’s principal deputy prosecutor, said he hopes the factory and artists’ colony can be coaxed to work together for a technological solution to the smell, which the artists say is debilitating.

Tim Peoples, one of the artists sued for slander, said he was relieved by the ruling. “I feel like the man who narrowly avoided being hit by a bus,” he said. But he said arbitration will be needed to end the squabble over the odor.