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

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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.

The Court of Appeal properly focused on the gravamen of the complaint. The fact that the stadium was a matter of public interest was cool and all, but that’s not what the complaint was about. The complaint was a simple breach of contract action (among other claims), seeking damages for Carson’s failure to honor the exclusivity provision. As the court stated:

While having an NFL team, stadium, and associated developments in Carson is no doubt a matter of substantial public interest, plaintiffs’ complaint does not concern speech or conduct regarding a large scale real estate development or bringing an NFL team to Carson and building it a stadium. It instead concerns the identity of the person(s) reaching out to the NFL and its teams’ owners to curry interest in relocating to Carson. The identity of the City’s representative is not a matter of public interest.

Now, I’m oversimplifying, of course, and the creativity of the approach indicates that the attorneys for the city probably did read more than the Cliff Notes.

The attorneys for the city believed that they could shoehorn this into the anti-SLAPP statute under subsections (e)(2) and (e)(4) of section 425.16, arguing that “[t]he real estate development alleged in the [first amended complaint]”, including development of an NFL stadium in the City, is necessarily a matter of public interest within the scope of section 425.16, subdivision (e)(4). They further argued that Rand’s claims fall within the scope of section 425.16, subdivision (e)(2) because “the Exclusive Agency Agreement [“EAA”] and the project as a whole were the subject of multiple legislative and other official proceedings,” as shown by votes on the EAA by the City Council and the City‘s Economic Development Commission.

In other words, Carson’s attorneys thought this was akin to discussions at a city council meeting, and was therefore protected speech. But, as the Court of Appeal reasoned, if that were true, then no one could ever sue a government agency for breaching a contract.

Thus, the cause of action is not premised upon protected free speech or the right to petition for redress of grievances, but upon the City‘s conduct in carrying out (or not) its contract with Rand Resources, with an allegation the breach of contract was accompanied by fraud in two forms: covering up the breach (including Dear‘s false denial about knowing Bloom), and a pre-agreement misrepresentation that the EAA would be renewed if Rand made reasonable progress. The mere fact that some speech occurred in the course of the asserted breach does not mean that the cause of action arises out of protected free speech. To hold otherwise would place the vast majority, if not all, civil complaints alleging business disputes and a large portion of tort litigation within the scope of section 425.16.

Carson’s actions did not arise from an act in furtherance of its right of free speech or to petition for redress of grievances and were not in connection with an issue of public interest, and therefore fell outside the scope of the anti-SLAPP statute.

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Aaron Morris, Attorney
Aaron Morris
Morris & Stone, LLP

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