Case Results

Mandated Arbitration Does Not Create a “Protected Activity”


A decision that involves both beer and anti-SLAPP law is right up my alley, so I had to bring you the details of Mission Beverage Company v. Pabst Brewing Company, LLC out of the Second District.

The importance of this case is the lesson it teaches in focusing on whether the conduct in question is indeed “protected activity” such that it satisfies the first prong of the anti-SLAPP analysis. As I have stated here before, the scope of the anti-SLAPP statute has grown and grown, but attorneys must not give short shrift to the first prong.

I. Facts

Defendant and appellant Pabst Brewing Company, LLC (Pabst) is a brewer of beers; among others, Pabst brews such American classics as Pabst Blue Ribbon (a beer I will occasionally enjoy on a hot day), Colt 45 Malt Liquor (good only for cleaning spark plugs), Old Milwaukee (not as bad as Budweiser, but something I would drink only if I had not had a cold beer for over a year and nothing else was available), Schlitz (I don’t recall if I liked it), and Stroh’s (I’ve never tried it).

In January 2009, Pabst entered into a written Distributor Agreement (Agreement) with Mission Beverage Company (Mission). Pabst granted Mission the exclusive right to distribute many of its beers within specifically delineated boundaries within Los Angeles County. In turn, Mission promised to “aggressively promote, encourage, and increase” the sales of, and “customer satisfaction” with, those beers. The parties’ powers to terminate the contract were not the same: Mission could terminate the contract with 60 days’ notice and irrespective of cause, while Pabst could terminate the contract only for one of ten enumerated reasons and then only if it gave Mission an opportunity to cure. One of those ten reasons, memorialized in section 8.2.10 of the Agreement, permits Pabst to terminate the Agreement if Pabst has a “right to terminate” under “applicable state or federal law, statute or regulation.” The Agreement also provides that any and all litigation should occur in court, and contemplates that Mission recover attorney’s fees if it prevails in litigation against Pabst.

In November 2014, Pabst came under new ownership. Three months later, in February 2015, Pabst sent Mission a letter “commencing termination” of the Agreement “pursuant to section 25000.2 and Section 8.2.10 of the Agreement.” Pabst stated that Classic Distributing & Beverage Group, Inc. (Classic) and Beauchamp Distributing Company (Beauchamp) would be replacing Mission as Pabst’s distributor. (I’m sure that would hurt from an economic standpoint, but I have to believe there would be some relief in no longer having to purvey Colt 45 Malt Liquor.) Pabst did not cite any other basis for terminating the Agreement.

The liquor industry is highly regulated, and section 25000.2 provides that when a brewer who acquires the right to manufacture beer “cancels an existing beer wholesaler’s rights to distribute a product,” that successor brewer’s designated replacement distributors must negotiate in good faith – and, failing that, arbitrate – with the existing distributor “to determine the fair market value of the affected distribution rights.” Pretty sweet protection. The brewer can fire you, but you get the fair market value for the distribution rights. Adhering to these procedures, Pabst’s designated distributors tried to negotiate with Mission, but Mission would not go quietly into that good night. It would not agree to a price so in March 2015, Pabst’s sent Mission a letter initiating arbitration.

II. Procedural Background

The following month, Mission responded by suing Pabst for (1) breach of contract, and (2) declaratory relief. Specifically, Mission alleged that Pabst breached the Agreement by “attempting to terminate” the Agreement on the basis of section 25000.2, which did not “provide an independent right to terminate ” Mission also sought a declaration that there was no valid “termination” of the Agreement.

So that left Mission with two litigation fronts – the arbitration and the litigation. Mission made several attempts to halt the ongoing arbitration between itself and Pabst’s newly designated distributors, all to no avail. Mission made an ex parte motion to stay the arbitration, but that motion was denied “without prejudice” to filing a noticed motion. Mission thereafter filed a noticed motion, but that motion was also denied. Not deterred, Mission also asked the arbitrator to dismiss the arbitration, but the arbitrator refused.

The arbitrator issued a final award in October 2015. In the award, the arbitrator made clear that his order “contained no findings, declarations or damages determinations regarding Mission’s pending civil cause of action that Pabst breached the Agreement.” This is an important point, because it made clear that the arbitrator viewed the arbitration and litigation as separate and distinct, with different issues presented. But as to the arbitration, the arbitrator fixed the fair market value of the distributorship rights conferred by the Agreement. Mission did not appeal the award, and Classic and Beauchamp thereafter paid Mission the amount fixed by the arbitrator.

For its part, Pabst refused to recognize the distinction being made by the arbitrator, and filed a motion to strike Mission’s lawsuit under the anti-SLAPP statute. Pabst argued that the “linchpin” of Mission’s lawsuit was Pabst’s “invocation of the statutorily-mandated arbitration process under section 25000.2,” which Pabst asserted was “protected activity” under the anti-SLAPP statute. Pabst further contended that Mission’s lawsuit lacked minimal merit because no “legally viable or non-duplicative remedy” remained once Mission had accepted the payment reflecting the fair market value of its distributorship rights from Classic and Beauchamp.

The theory was not as crazy as it may appear at first blush. Remember, “protected activity” under the anti-SLAPP statute includes activities related to “official proceedings” such as “statutorily required arbitration.” This wasn’t some contract requiring arbitration, but rather was a statutory scheme that forced arbitration, and here Mission was suing Pabst for following that mandated process, according to Pabst’s argument.

But the trial court disagreed and denied the anti-SLAPP motion. It concluded that Mission’s lawsuit was separate and distinct from the arbitration: The lawsuit was “for breach of the contract between Mission and Pabst,” while the arbitration was “between the distributors,” and the primary issue in the lawsuit – “whether the Agreement was validly terminated” – is “an issue separate from (and prerequisite to) the arbitration, not part of it.”

Despite the seemingly clear logic of the trial court’s conclusion, and the obvious problems that will be discussed below, Pabst appealed.

III. A Primer on Beer Law

To fully understand the reasoning of the Trial Court and Court of Appeal, a primer on beer law is required. The Alcoholic Beverage Control Act (Act) divides up the distribution chain for alcohol into three tiers – namely, (1) “manufacturers,” (2) “wholesalers” or distributors, and (3) “retailers”; and generally prohibits each from having an ownership interest in the others.

Section 25000.2 dictates the procedures to be followed when a “successor beer manufacturer acquires the rights to manufacture” held by a brewer, and then “cancels any of the [brewer’s] existing beer [distributor’s] rights to distribute the product.” The successor brewer “cancels” a distribution contract if it “terminates, reduces, does not renew, does not appoint or reappoint, or causes any of the same.” The pertinent procedure is as follows. First, the successor brewer must “notify” the existing distributor of its “intent to cancel any of the existing distributor’s rights to distribute the product.” Second, the entity the new brewer wants to be its new distributor – whom the Act calls the “successor beer manufacturer’s designee” – is required to “negotiate in good faith” with the existing distributor to “determine the fair market value of the affected distribution rights.” “Fair market value” is defined as “all elements of value, including, but not limited to, goodwill.” If the existing distributor and the successor brewer’s preferred distributor can “agree to the fair market value,” then the successor brewer’s preferred distributor “shall compensate the existing” distributor “in the agreed amount.” If they “are unable to mutually agree,” then the successor brewer’s preferred distributor “shall initiate arbitration to determine the issue of compensation for the fair market value of the affected distribution rights” following the time lines set forth in the statute, and if the existing distributor does not appeal the arbitration award, the successor brewer’s preferred distributor must pay the existing distributor that amount.

IV. Analysis

A. What conduct is the basis for the challenged claim(s), and does that conduct constitute protected activity?

Pabst argued that the trial court erred in concluding that Mission’s breach of contract and declaratory relief claims did not arise from protected activity because (1) those claims are based upon Pabst’s letter purporting to cancel the Agreement, and (2) that letter invokes section 25000.2’s procedures and is accordingly preparatory to statutorily mandated arbitration, which constitutes an official proceeding within the meaning of Code of Civil Procedure section 425.16, subdivision (e)(1) and (2).

1. What conduct by Pabst is Mission challenging?

A claim is subject to the anti-SLAPP statute only if conduct constituting protected activity “itself is the wrong complained of.” Park, 2 Cal.5th at p. 1060. Thus, where a plaintiff’s claim is based upon “an action or decision” of the defendant, it is not enough that some protected activity by the defendant precedes that action or decision, that some protected activity is the means of communicating that action or decision, or that some protected activity constitutes evidence of that action or decision. To fall under the anti-SLAPP statute, the challenged action or decision itself must be protected activity.

This is where so many attorneys go wrong. As occurred here, the attorney will see that a mandated action precipitated the complaint, and therefore jump to the conclusion that the complaint is arising from that protected activity. Close, but no cigar. The attorney needs to take one more baby step back to get a slightly larger view of the issue. The protected activity may be what lead to the complaint, but it does not necessarily follow that the complaint is challenging the protected activity. Where a plaintiff’s claim attacks only the defendant’s decision to undertake a particular act, and if that decision is not itself protected activity, that claim falls outside the ambit of the anti-SLAPP statute.

For example, in Park (above), the California Supreme Court held that the anti-SLAPP statute did not apply to a claim challenging a university’s decision to deny tenure to a professor, even though the decision was communicated in writing and even though the university dean’s comments supplied evidence of discriminatory animus. In Ulkarim v. Westfield LLC (2014) 227 Cal.App.4th 1266, 1275-1276, 1279, the court held that the anti-SLAPP statute did not apply to a claim challenging a landlord’s decision to terminate a tenancy, even though the landlord subsequently served a notice to quit and filed an unlawful detainer lawsuit. And in McConnell v. Innovative Artists Talent & Literary Agency, Inc. (2009) 175 Cal.App.4th 169, 176-177, the court held that the anti-SLAPP statute did not apply to a claim challenging an employer’s decision to wrongfully terminate employees, even though the employer later sent a letter terminating those employees. Only when the decision that the plaintiff attacks is itself protected activity will the anti-SLAPP statute apply.

In this case, Mission’s breach of contract and declaratory relief claims challenge Pabst’s decision to terminate the Agreement. That is because both claims challenge Pabst’s right to terminate the Agreement and, in particular, Pabst’s assertion that section 25000.2 provides such a right. Pabst’s subsequent letter merely communicated Pabst’s decision to terminate, but “that communication does not convert [Mission’s] suit into one arising from such speech.” (Park, supra, 2 Cal.5th at p. 1068.)

2. Is that conduct protected activity?

The Court of Appeal properly concluded that Mission’s claims did not involve protected activity for two reasons. First, Mission’s claims are based upon Pabst’s decision to terminate the Agreement – not Pabst’s subsequent letter communicating that decision. That decision precedes and is unconnected with any official proceeding. Second, that letter did not qualify as protected activity. Although section 25000.2’s mandatory arbitration undoubtedly qualifies as an official proceeding under the governing precedent, Pabst’s letter is not preparatory to such an arbitration. That is because section 25000.2 first contemplates that the existing distributor and successor brewer’s designated distributors negotiate in good faith and resort to arbitration only if negotiations fail. Like the insured who files a claim not knowing whether the insurer will pay the claim or fight the claim in litigation, Pabst had “no reason to believe” that arbitration “will follow” from its letter because Mission, Classic, and Beauchamp could well have negotiated a settlement and obviated any need for arbitration.

B. Do Mission’s Claims Have Minimal Merit?

Since the first prong of the anti-SLAPP analysis was not met, the second prong becomes moot, but for fun let’s analyze that as well.

Pabst argued that Mission’s two claims lacked the minimal merit necessary to withstand its anti-SLAPP motion. Specifically, Pabst asserted that Mission could not prove (1) any breach of contract because section 25000.2 independently confers upon brewers a right to terminate a distribution contract, or (2) any damages arising from any breach because Mission was made whole by Classic’s and Beauchamp’s payment reflecting the fair market value of Mission’s distribution rights. Because any breach of contract claim requires proof of a contractual duty, breach of that duty, causation, and damages, and because Mission’s declaratory relief claim that there was no valid termination in effect seeks a declaration that Pabst breached the contract, Mission was required to make out a prima facie case that Pabst breached the Agreement and that Mission was damaged by that breach.

The trial court did not bother to analyze the second prong, but the Court of Appeal took the opportunity, as permitted by Schwarzburd v. Kensington Police Protection & Community Services Dist. Bd. (2014) 225 Cal.App.4th 1345, 1355 and Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 615-616), on the grounds that an analysis of section 25000.2 was important.

1. Has Mission made a prima facie showing that Pabst breached the Agreement?

Because Pabst’s termination of the Agreement rested solely on its position that section 25000.2 confers upon brewers an independent right to terminate a distribution contract, whether Mission has made out a prima facie case for the element of breach turns on whether section 25000.2 confers such a right. This is a question of statutory interpretation, which the court reviewed de novo. (Weatherford v. City of San Rafael (2017) 2 Cal.5th 1241, 1247.)

It concluded that the text of section 25000.2 sets forth the procedures that must be followed when a “successor beer manufacturer acquires the rights to manufacture a product” and “cancels any of the existing distributor’s rights to distribute the product.” The statute prescribes what happens after the successor brewer cancels, but nothing in the statute’s text expressly grants the successor brewer the precursor right to cancel distribution rights. More to the point, nothing in the statute’s text expressly grants the successor beer manufacturer the further right to cancel distribution rights regardless of its contractual obligations with the existing distributor.

Nor could the Court infer an implied right to cancel distribution contracts – with or without impunity – from section 25000.2’s legislative history.

“To begin, section 25000.2 was sponsored by the California Beer and Beverage Distributors. It seems highly unlikely that an organization representing distributors would sponsor legislation that would deprive their members of their negotiated contractual rights. Moreover, section 25000.2 was enacted to address a specific problem: Brewers were buying up and consolidating more and more brands of beer and then seeking to use their own network of distributors, so there was a need for “an authorized and structured process to insure the timely payment of fair and market-based compensation for the transfer of brands between” distributors. Solving this problem does not require brewers to be granted an unvarnished right to terminate their distributorship contracts.”

Thus, Pabst’s argument was built entirely on a false premise. It claimed that having notified Mission that its rights were being terminated, arbitration naturally followed, and both were protected activities. But it still remained to be determined if Pabst had the right to terminate to begin with under the terms of the Agreement.

The Court goes on to list several more reasons that Pabst’s argument fails, but one in particular was the sort that before I was through the first pages of the decision, I was scratching my head wondering how Pabst could not see this point or chose to ignore it.

Pabst argued that section 25000.2 must be read to foreclose any lawsuit by an existing distributor against the brewer because such a lawsuit will always be either unripe or moot. Here was the reasoning of Pabst, which can be a little difficult to follow.

Under the scheme of section 25000.2, at least as Pabst interpreted it, (1) the termination notice is sent, (2) but the original distributor goes right on distributing until, (3) the new distributor pays the fair market value for the distributorship, whether that number is determined by agreement or arbitration. Thus, according to Pabst, there is no harm no foul to the prior distributor. It continued to make its profits up to the time it was paid in full for the distributorship.

I’m sure you begin to see the flaws in that argument. By that reasoning, no business is harmed by an unauthorized takeover, so long as it is paid the fair market value of the business.

According to the reasoning of Pabst, once the distributor is paid, any lawsuit instantly becomes moot because the payment makes the distributor whole and makes any declaratory relief redress for a “past wrong.”

The Court of Appeal saw the flaws as well, finding that Pabst was incorrect that a distributor’s claim for breach of contract is not ripe as long as it continues to distribute the brewer’s beer because, quite simply, the distributor may sue for anticipatory breach. It also concluded that Pabst was incorrect in arguing that a distributor’s claim is moot once the newly designated distributors remit the fair market value of the distribution rights because, additional damages may be available if there is a wrongful breach and there remains a live “actual controversy” warranting declaratory relief regarding those additional damages and the wrongful breach that caused them.

Perhaps Pabst can be forgiven for thinking there would be no future profits from the distribution of its beer, because of the Colt 45 component.

So, to summarize, when considering an anti-SLAPP motion, always examine the “protected activity”. Mission was suing for breach of contract and declaratory relief, arising from Pabst’s termination of the contract. Even if Pabst was 100% confident that it had the unfettered right to terminate the contract (a position that turned out to be incorrect), this remained a contract claim and did not involve any protected activities within the meaning of the anti-SLAPP statute.

SLAPP023 – Privileged Speech Can Survive Anti-SLAPP Motions

In Episode 23 of the California SLAPP Law Podcast, we examine two cases that consider how privileged speech should be viewed during the two-prong anti-SLAPP analysis. As you will hear, the fact that the speech was privileged does not mean it automatically falls under the anti-SLAPP statute.

Edalati v. Kaiser Foundation Health Plan, Inc.

This unpublished case is our starting point. In Edalati, a dentist learned that Kaiser Foundation Health Plan had sent a letter to dozens of her patients, falsely informing them that the dentist was on a government list for Medicare abuse. Kaiser realized it’s mistake and sent out a retraction letter, but by that point the damage had been done. The dentist sued for defamation, and Kaiser responded with an anti-SLAPP motion.

Kaiser’s letter clearly falls under the common interest privilege of Civil Code section 47, but is that enough to prevail on an anti-SLAPP motion?

Lefebvre v. Lefebvre

In opposition to Kaiser’s anti-SLAPP motion, the dentist in Edalati relied on the case of Lefebvre v. Lefebvre. In that case, a wife, in the hope that it would help in a custody dispute, filed a false police report against her husband, claiming he had threatened to kill her and their children. He was arrested and charged. He was found not guilty, and then sued his ex-wife for defamation. The wife brought an anti-SLAPP motion.

The report to the police enjoys an absolute privilege, so the anti-SLAPP motion must have been granted, right? Don’t be so sure. Listen to this latest episode to find out. Here’s a hint. The case law discussed in this episode offers a means to save attorneys and their clients from an award of attorney fees when they end up on the wrong side of an anti-SLAPP motion.

A great, FREE program

The publisher stopped supporting and offering a fantastic program called Notescraps that I use every day in my practice. I not only prevailed on them to keep offering the program, I got them to give it to you for free (it used to be $20). I tell you how to get it on this episode.

Book ’em Danno.

And finally, just for fun, I tell the tale of my encounter with some officious deputies at the courthouse. I still made it to court and still won my motion.

Anti-SLAPP Motions in Federal Court – Some Judges Still Complaining

No Whiners Annoying Complainers Irritating Problem Customer
On August 3, 2016, the Ninth Circuit issued an opinion in the case Travelers Casualty Insurance Company of America v. Robert Hirsh.

The Court affirmed the district court’s denial of Robert Hirsh’s anti-SLAPP motion (Cal. Civ. Proc. Code § 425.16) to strike the second amended complaint filed by Travelers Casualty Insurance Company of America. Hirsh had alleged that Travelers’ claims arose out of his representation of Travelers’ insured, Visemer De Gelt, as Cumis counsel; and his activity was therefore protected under the anti-SLAPP statute.

The Ninth Circuit held that because Travelers’ causes of action were not based on an act in furtherance of Hirsh’s right of petition or free speech, they did not “arise from” protected activity, and thus did not satisfy the first prong of the anti-SLAPP analysis. The Court also held that Travelers established a probability of prevailing on the merits sufficient to survive a motion to strike. The Court further held that California’s litigation privilege, Cal. Civ. Code § 47(b), did not bar the suit because the causes of action arose from Hirsh’s post-settlement conduct, not his communications with De Gelt in settling a prior lawsuit.

Should we allow anti-SLAPP motions in Federal Court?

But like a number of appellate judges in the Ninth Circuit, Judge Kozinski and Judge Gould, although they concurred in the opinion, could not pass up the opportunity to complain about how anti-SLAPP motions in federal court were making them work too hard. Judge Kozinski decried that the existing case law is wrong, and he would urge the court to follow the D.C. Circuit’s holding in Abbas v. Foreign Policy Grp., LLC, which held that anti-SLAPP motions do not belong in federal court because they directly conflict with the Federal Rules of Civil Procedure. At the very least, Judge Kozinski urged the court to reconsider the holding in Batzel v. Smith, which allows defendants who lose anti-SLAPP motions to bring an immediate interlocutory appeal.

With all due respect, the reasoning of Judge Kozinski does not withstand scrutiny, as will be shown hereinbelow. What follows is Judge Kozinski’s concurring opinion, with my response to him in red on each of his points. Read the rest of this entry »

Supreme Court Finally Applies Anti-SLAPP Statute to Mixed Causes of Action

Mixed Messages Poor Communication Misunderstood

On August 1, 2016 the California Supreme Court issued an opinion on anti-SLAPP law that will likely prove to be the most impactful decision of this decade.

The Supreme Court used the issues presented by the case of Baral v. Schnitt to finally clear up a split of authority that has existed since at least 2004, namely, what to do with mixed causes of action.

The history of the Courts’ struggles with mixed causes of action.

Read the rest of this entry »

Porn Star versus Firefighter – The Vagaries of Anti-SLAPP Law

Puzzled Confused Lost Signpost Showing Puzzling Problem
Litigation is never a 100% certainty, as evidenced by the two cases that follow. But an attorney who really knows his or her stuff can certainly mean the difference between victory or defeat. If you are going to enter the murky waters of an anti-SLAPP motion or are contemplating a defamation case that could invoke an anti-SLAPP motion, be sure you have a good anti-SLAPP attorney.

Today we discuss two seemingly identical cases, at least from the legal issues they presented, but which ended in completely opposite results.

The Vagaries of Anti-SLAPP Law

In our first example, The New York Daily News (that bastion of journalism) reported on a sex scandal at the fire department, and the article included two photographs. The first photo was a generic stock photo showing firefighters at the scene of a fire. But the second photo is the one that started the brouhaha. Inexplicably the newspaper chose to use a photo of firefighter Francis Cheney II, taken during a formal 9/11 ceremony. The newspaper’s intent (so they claimed) was simply to use Cheney as a representation of a firefighter. But here was an article about a sex scandal, with a picture of Cheney. How could any reasonable person take that as anything other than an implied reference that Cheney was one of the firefighters involved?

Cheney certainly thought his photo would be taken that way, so he sued the newspaper, claiming that the photo had harmed his reputation by implying that he was one of the firefighters involved in the sex scandal. But a judge in federal court dismissed the action, finding that since the article never mentioned Cheney by name, it was too much of a stretch to assume that readers would think the photo was there because he was a participant.

So, the rule of law appears to be that if your photo is included in a sex scandal story, don’t bother suing, because the court will throw out your case if the other side brings an anti-SLAPP motion, because you won’t be able to prove a likelihood of success on your case. Good to know.

Now we turn to the case of Leah Manzari v. Associated News Ltd. Read the rest of this entry »

When Considering an Anti-SLAPP Motion, Focus on the Gravamen of the Complaint

Fans on stadium game panorama view

I am the anti-SLAPP guy, and I’d be the last to criticize creative applications of the anti-SLAPP statute. But sometimes it is as though the attorney bringing an anti-SLAPP motion only read the Cliff Notes on the process. He knows some of the buzz words, such as “public interest” and “protected speech”, but lacks the big picture. When considering an anti-SLAPP motion, you must consider the true gravamen of the complaint.

Case in point is the recent Court of Appeal opinion in Rand Resources, LLC v. City of Carson (Los Angeles Superior Court Case No. B264493), arising from the efforts to build a football stadium in the City of Carson. The ruling of the Court of Appeal, published on May 31, 2016, can be found here.

Carson wanted to build a stadium and entertainment complex, and was hoping to woo the NFL to relocate a team there. Carson hired a lobbyist, of sorts, Richard Rand, giving him an exclusive arrangement to negotiate with the NFL.

Things between Rand and the city got off to a rocky start, leading Rand to successfully sue Carson for civil rights violations, alleging that the Mayor had demanded a bribe. The city and Rand both appealed, with the city claiming it had never happened, and Rand claiming he should get more in damages.

The parties eventually settled, but Carson did not honor Rand’s exclusivity arrangement. Rand sued again, this time for breach of contract and other claims.

“Well,” thought the city’s attorneys, “this whole football stadium thing is generating a ton of public interest, and anti-SLAPP motions can be brought where the situation is a matter of public interest, so let’s bring an anti-SLAPP motion.”

And that’s just what they did. The city challenged Rand’s action with an anti-SLAPP motion.

“Well,” thought the judge, “this whole football stadium thing is generating a ton of public interest, and anti-SLAPP motions can be brought where the situation is a matter of public interest, so I guess I should grant the anti-SLAPP motion.”

And that’s just what he did. Apparently having read the same Cliff Notes, the judge granted the anti-SLAPP motion. Rand appealed. Read the rest of this entry »

SLAPP020 – Sixth District Weighs in on Admissibility of Yelp Reviews and the Law on Inferences

California-SLAPP-Law-Cover-300x300 (1)

In Episode 20 of the California SLAPP Law Podcast, we discuss important Evidence Codes, and my VINDICATION by the California Court of Appeal.

The vindication comes in the form of a published opinion from the Sixth District Court of Appeal. I was brought in as co-counsel to first chair an internet defamation trial in Santa Cruz, representing a client (an attorney) we will refer to as “Esquire”. We were also defending a cross-complaint for breach of a commercial lease. The trial was assigned to Judge Ariadne Symons, who by her own admission was probably not the best choice for this case, confessing that she knew nothing about the internet and computers.

At commencement of trial, the defense took one look at our trial brief, and immediately dismissed the cross-complaint, leaving for trial only our complaint for defamation and breach of the covenant of quiet enjoyment. Unfortunately, Judge Symons’ fundamental misunderstanding of the rules of evidence, both as to what is necessary to admit documents posted on the internet, and as to indirect evidence and inferences, led to the exclusion of all of our defamation evidence.

I was confident that the matter would be reversed on appeal, and I was looking forward to the Court of Appeal’s opinion, not just for the benefit of the client and my own vindication, but because until the Court of Appeal instructed Judge Symons on fundamental evidentiary law, a lot of parties in her court were going to be deprived of justice. Read the rest of this entry »

SLAPP019 – Five Best Published Anti-SLAPP Decisions (so far) in 2016

California-SLAPP-Law-Cover-300x300 (1)

On Episode 19 of the California SLAPP Law Podcast, we go through my five favorite reported anti-SLAPP decisions from the first half of 2016.

But first we begin with a cautionary tale of an attorney who is being sued for malpractice for failing to have me review his complaint before it was filed! (OK, there’s a back story here, so be sure to listen to this episode to find out what I’m talking about.)

Then, we turn to the five best published anti-SLAPP decisions from the first half of 2016. The bold cases are the top five; the non-bolded are other cases I discuss as well.

Lanz v. Goldstone (2015) 243 Cal.App.4th 441

Another cautionary tale, this time of an attorney who followed the old adage, “the best defense is a good offense.” He tried to intimidate an attorney from seeking his legal fees, and bought himself a malicious prosecution action in the process. You’ll learn a lot about malicious prosecution actions and under what circumstances they can survive an anti-SLAPP motion.

Bertero v. National General Corp. (1974) 13 Cal.3d 43

Speaking of malicious prosecution actions, this is the seminal case.

Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135

“When the proceeding terminates other than on the merits, the court must examine the REASONS for termination to see if the disposition reflects the opinion of the court OR THE PROSECUTING PARTY that the action would not succeed.”

Karnazes v. Ares (2016) 244 Cal.App.4th 344

Speaking of over-pleading, our second case is Karnazes v. Ares, decided by the Second District in January of 2016. In this case, the plaintiff alleged 22 – count em – 22 causes of action against the defendants. Karnazes lost to an anti-SLAPP motion, but made some interesting arguments in opposition to that motion.

Sweetwater Union School District v. Gilbane Building Company (2016) 245 Cal.App.4th 19

Are political bribes protected by the anti-SLAPP statute? Listen to find out (and the answer will likely surprise you). And find out how you can support an anti-SLAPP motion with declarations without using declarations.

Crossroads Investors v. Federal National Mortgage Association (2016) 246 Cal.App.4th 529

It may look like litigation, and it may quack like litigation, but that doesn’t necessarily make it litigation for purposes of the litigation privilege and the first prong of the anti-SLAPP analysis.

JM Manufacturing v. Phillips & Cohen (2016) 247 Cal.App.4th 87

Yet one more action against an attorney; in this case an attorney who was so proud of his firm’s trial victory that he published a press release and bought the firm a defamation action. It was a split decision.

And finally, in the after show, I provide an appeal tip that might save you from some embarrassment.

SLAPP018 – All You Need to Know About Anti-SLAPP Motions in Federal Court

California-SLAPP-Law-Cover-300x300 (1)

In episode 18 of the California SLAPP Law Podcast, I discuss an anti-SLAPP motion I decided NOT to pursue, and why. We discuss the case of Weinberg v. Feisel (2003) 110 Cal.App.4th 1122.

Then we dive deep into the pros, cons, and frustrations of bringing anti-SLAPP motions in Federal Court. Since 1999, the Ninth Circuit has recognized that the California anti-SLAPP statute can be applied to cases in Federal Court, but the motion you bring there is a very different animal from what is pursued in State Court. As part of our discussion on anti-SLAPP motions in Federal Court, we cover the following cases:

Erie Railroad Company v. Tompkins (1938) 304 U.S. 64

Swift v. Tyson (1842) 41 U.S. 1

United States Newsham v. Lockheed Missiles and Space Co. (1999) 171 F.3d 1208

Makaeff v. Trump University (2013) 715 F.3d 254

Verizon Delaware, Inc. v. Covad Communications (2004) 377 F.3d 1081

Globetrotter Software, Inc. v. Elan Computer Group (2004) 362 F.3d 1367

SLAPP015 – It’s Never Too Late to File an Anti-SLAPP Motion

California SLAPP Law Podcast

In Episode 15 of the California SLAPP Law Podcast, we discuss (1) the perils of overreaching in your anti-SLAPP motions (making iffy challenges to causes of action can come back to bite you, even if you win), and (2) why you should NEVER assume it’s too late to bring an anti-SLAPP motion , and some strategies to keep in mind when you do bring an anti-SLAPP motion late in the game.

We also discuss the case of Chitsazzadeh v. Kramer & Kaslow (2011) 199 Cal.App.4th 676, which held [spoiler alert] that no leave is required to file a late anti-SLAPP motion.

We examine two cases that discuss whether it is an abuse of discretion to refuse to consider a late anti-SLAPP motion. Du Charme v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107 held that it is never an abuse of discretion for a trial court to refuse to consider a late-filed anti-SLAPP motion, regardless of the merits, and Platypus Wear, Inc. v. Goldberg (2008) 166 Cal.App.4th 772, which held that it can be an abuse of discretion to allow an anti-SLAPP motion to be brought too late in the action.

(But the title says it’s never too late to file an anti-SLAPP motion. How can you reconcile that with the holding of Platypus? Listen to Episode 15 to find out!)

Aaron Morris, Attorney
Aaron Morris
Morris & Stone, LLP

Tustin Financial Plaza
17852 17th St., Suite 201
Tustin, CA 92780

(714) 954-0700

Email Aaron Morris
Latest Podcast
California SLAPP Law Podcast
SLAPP Law Podcast

Click on PLAY Button above to listen to California SLAPP Law Podcast, or listen on Stitcher Radio, iTunes and TuneIn Radio!

Subscribe
SiteLock
Section 6158.3 Notice
NOTICE PURSUANT TO BUSINESS & PROFESSIONS CODE SECTION 6158.3: The outcome of any case will depend on the facts specific to that case. Nothing contained in any portion of this web site should be taken as a representation of how your particular case would be concluded, or even that a case with similar facts will have a similar result. The result of any case discussed herein was dependent on the facts of that case, and the results will differ if based on different facts.