California SLAPP Law

I had a relatively rare moment of brilliance today that may well cure many of the problems with the anti-SLAPP process.

Here is how it came about. I was retained as an expert to opine on the reasonableness of the attorney fees being sought by a law firm that prevailed on an anti-SLAPP motion. As is common, especially among large firms, a victory on an anti-SLAPP motion is viewed as a winning lottery ticket, and the following motion for attorney fees reaches into the stratosphere. In this instance, defense counsel was claiming that 331 hours were spent on the special motion to strike. This was a very basic motion with no special factors to increase the time spent on the motion, such as protracted discovery on the SLAPP issues; just a motion and a reply brief.  My expert declaration resulted in a significant reduction in the fees awarded to the firm, but the firm still received far too much.  It was another typical example where a large firm inflates its bill by 500%, knowing that even if the court cuts the bill in half, the firm will still have a very good pay day.

It’s not supposed to work this way, but the courts simply do not adhere to the controlling authority.  Case authority holds that when an inflated bill is submitted, the offending firm should receive nothing.  Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138.  Consider the impact on this firm if the court had followed the law and denied all the fees because of the inflated request.  Undoubtedly the firm would have been far more reasonable with its next request.  But that never happens.  Instead, if the court is offended by the inflated amount, at most it will adjust the amount down as occurred in this case.

The failure of the courts to follow the law in this area has created an additional detrimental effect that I previously witnessed in the bankruptcy court.  At the conclusion of a bankruptcy, the attorney must ask for his fees to be approved by the court.  In an effort to be fair to all the creditors, the bankruptcy judges would often cut the fees in half, so that the attorney along with all the other creditors was taking a hit.  It didn’t take long for bankruptcy attorneys to find a way around this practice.  They all doubled their hourly rates, so if the judge cut the fees they would still be left with their “real” rate.  And so it has become in the anti-SLAPP process.  So many unethical attorneys are inflating their fee bills and asking for $100,000 for a simple anti-SLAPP motion, that some judges automatically reduce them.  But then what happens to attorneys like me that submit an honest fee bill of, say, $18,000?  Some judges are so jaded that they will reduce that bill as well.  This is unfair to the client who now does not receive the full amount paid, and as a result the court is creating another bankruptcy approach where attorneys will be incentivized to inflate their bills as protection against unwarranted reductions.

So, back to my brilliant idea. The California Legislature should change the procedure for recovery of attorney fees on an anti-SLAPP motion. Instead of waiting until after the motion is granted, the new procedure would require that the attorney fees be set forth in the motion. Then (here comes the good part), if the motion is denied, then the party bringing the motion must pay the amount it set forth in its motion to the other side. In this way, padding is greatly discouraged. Every dollar sought in the motion is a dollar the party might have to pay to the other side. The requested fees would likely be far closer to the actual amount of fees.

“But that flies in the face of the anti-SLAPP process, which is supposed to offer defendants a way to dispose of SLAPP actions and recover the fees in doing so”, you say. Well, let’s look at that. If the motion is denied, and assuming the court’s decision to deny the motion was correct, then the action was not a SLAPP action to begin with and the motion should not have been brought. Indeed, that is one of the concerns being expressed by the courts; that anti-SLAPP motions are being brought far too frequently in cases where they do not apply. Further, knowing that the attorney fees may have to be paid to the other side, the incentive to spend many hours on an anti-SLAPP motion is removed, and instead the incentive becomes to do the motion as efficiently as possible.

OK, admittedly I am saying this slightly tongue in cheek. Such a procedure is contrary to the American Rule, and would provide attorney fees to the opposition with no consideration of how much time was spent opposing the motion. So, if my proposal is too bold, a similar result could be achieved by tweaking the anti-SLAPP statutes. Add a provision which states that where the fee bill is inflated, the party receives nothing. You may still end up with situations where a firm will submit a greatly inflated bill in the hope that the court will approve it without review, but on the other hand, a firm claiming 331 hours for a single motion will know that the outlandishness of the claim will result in no fees. Also, in tweaking the statute, lower the threshold for receiving attorney fees for successfully opposing an anti-SLAPP motion.