California SLAPP Law

Today we follow up on a couple of our cases, which were reported on the California SLAPP Law Podcast, episodes 8 and 9, which led to anti-SLAPP victories.

The Case of the Evil Yogurt Maker

In Episode 8, I told the tale of the Evil Yogurt Maker. I changed the nature of the businesses involved so I could tell the story, and made the plaintiff a yogurt maker. My client had called him out on some false advertising claims, and the Evil Yogurt Maker responded by bringing a defamation action.

Our client was a sophisticated businessman who had really done his research. Before calling us, he already knew about the anti-SLAPP laws in general, and was familiar with Code of Civil Procedure section 425.17 in particular. That is the section that exempts certain business versus business actions from the anti-SLAPP statutes.

Our client had been advised by other attorneys that he could not respond to the defamation action with an anti-SLAPP motion, specifically because of section 425.17. We disagreed. Although this was a business versus business action, section 425.17 has a number of requirements before it applies, including the fact that the alleged “defamer” had to be directing its remarks to likely customers. Here, the remarks had been directed to regulatory agencies.

Upon the filing of the anti-SLAPP motion, the Plaintiff cried “Uncle!” and the case went away.

Using Discovery to Harass

This one involves a victory on the way to an anti-SLAPP victory. In Episode 9, and in this article, I discussed the case we are handling, wherein a company is attempting to use the litigation process to keep our client from competing. In typical fashion when a company is trying to thwart competition, the Plaintiff company filed an action, making the usual nonsensical claims that the defendant is using trade secrets. In these actions, the Plaintiff knows they will never prevail if the case goes to trial, but they attempt to make the process so expensive and burdensome that the defendant agrees to find another line of work. (Perhaps California next needs to pass legislation that applies an anti-SLAPP approach to actions designed to frustrate competition.)

In these sorts of actions, the Plaintiff’s two primary harassment tools are injunctions and discovery. Prior counsel in the action had already defeated Plaintiff’s attempt to obtain an injunction, so Plaintiff’s counsel was using discovery and threats of motions to compel to harass.

As a new form of harassment, Plaintiffs then amended their complaint to add four causes of action for defamation, and we responded with an anti-SLAPP motion, which stayed all discovery in the action.

I predicted that, contrary to all law, Plaintiff’s counsel would go to court and ask for leave to continue with discovery relating to the other causes of action and defendants. You see, section 425.16 specifically provides that a plaintiff can request leave from the stay in order to conduct discovery on issues related to the anti-SLAPP, but that discovery is very proscribed. It not only has to be related to the issues raised in the anti-SLAPP motion, it must go to specific defenses. Indeed, the defendant can eliminate the request for discovery by simply agreeing to waive whatever defense the plaintiff is requesting leave to conduct discovery on. Under no circumstances would a plaintiff be permitted to continue discovery on the other causes of action not related to the special motion to strike.

But that didn’t keep Plaintiffs from asking. One could say it never hurts to ask, I suppose, but isn’t there something to be said for intellectual integrity?

We received notice of an ex parte application, wherein Plaintiff’s counsel was seeking an earlier hearing date on a motion for relief from the discovery stay. Due to docket conditions, our anti-SLAPP motion won’t be heard until February 2015, and the first available date for the motion for relief from the discovery stay was March 2015. Since that is after the anti-SLAPP motion, it will be moot.

Here is how we opposed the motion for an earlier hearing date. We acknowledged that of course motions to shorten time should be liberally granted, but here the request was for a pointless motion. Plaintiff isn’t requesting leave to conduct necessary discovery related to the anti-SLAPP motion, which is the only discovery that is permitted following the filing of the motion. Here, Plaintiff specifically requested leave to conduct ONLY discovery NOT related to the anti-SLAPP motion. We therefore argued that the requested relief was pointless. This court’s docket is so backed up that it takes seven months to have a motion heard. Why give one of those precious motion slots to someone bringing a pointless motion?

The court apparently agreed. Motion DENIED.