California SLAPP Law

It is typically the case that as I review a complaint for the first time, I spot the allegations that are based on protected speech, and then consider whether the plaintiff will be able to present a prima facie case under the second prong of the anti-SLAPP analysis.

But lately a number of cases have presented a situation where I immediately recognize that the plaintiff is facing a nearly impossible burden to show a prima facie case. For example, I have had a number of cases with claims for Negligent Infliction of Emotional Distress (NIED). In case you did not get the memo, NIED does not really exist as an independent claim; it is just a claim for negligence. But since a defendant has no general duty to avoid inflicting emotional distress on a plaintiff, a claim captioned as a claim for NIED is almost always dead on arrival. (I have provided the case authority at the end of this article.)

So instead of first seeing the protected speech, I spot the failure of the second prong of the anti-SLAPP analysis, and then focus on whether that defective claim was based on protected speech. If so, it presents the opportunity to use an anti-SLAPP motion as a motion for summary judgment.

Allow me to provide a recent example. While I tell the tale, see if you can spot the SLAPP.

The Indemnity Agreement

As always, changing the facts slightly to protect their privacy, my clients (we’ll call them “Clients”) entered into a service contract with Joe Dokes, Inc. The contract contained an indemnity provision, providing that Clients would be responsible for any costs, attorney fees, and damages incurred by Joe Dokes, Inc. as a result of any litigation arising from the contract.

Clients timely made all payments under the contract until they caught Joe Dokes, Inc. acting in a fraudulent manner, and stopped paying on that basis. Joe Dokes, Inc. sued Clients for the fairly nominal amount still due under the contract, and Clients cross-complained against Joe Dokes, Inc. and Joe Dokes individually for the fraud.

Having been sued individually, Joe Dokes came up with the brilliant idea to cross-complain back against Clients under the indemnity provision contained in the contract. The contract was between my clients and Joe Dokes, Inc. This fact was specifically alleged in the original complaint by Joe Dokes, Inc. Nonetheless, Joe Dokes alleged in his individual capacity that he was the sole shareholder and principal of Joe Dokes, Inc., and was therefore a party to the indemnity agreement. All of his causes of action were based on indemnity, pursuant to that agreement.

So what is an attorney to do?

The claim by Joe Dokes was nonsense. He does not get the benefit of a contract if he is not a party (or a third party beneficiary) of that contract. How can he sue for contractual indemnity if there is no contract to which he is a party?

If my clients’ cross-complaint had been based on the contract, then Joe Dokes might have had a viable claim. Clients had agreed to indemnify Joe Dokes, Inc., so one could reasonably argue that the indemnity extended to employees of the corporation, if the claims fell under the contract. But Clients were suing for fraud, and there would be no implication that the parties intended to indemnify the employees for separate and distinct torts.

But to defeat the cross-complaint, evidence would need to be presented to demonstrate that Joe Dokes was not a party to the agreement. A motion for summary judgment would do the job, but that requires months of notice, during which time Dokes would be free to harass my clients with discovery. If only there was some basis to challenge the cross-complaint with an anti-SLAPP motion, that would take months off the time to have the motion heard, would shut down any discovery, and would allow for recovery of attorney fees.

Did you spot the SLAPP?

Attorneys often fail to realize that they are filing a SLAPP because they think in terms of the claim and/or the seemingly obvious right to pursue that claim, instead of running the claim through the two prongs of the anti-SLAPP analysis.

No doubt the attorney for Joe Dokes thought he had found a clever way to give his client a shot at recovering his attorney fees, while at the same time intimidating Clients. If the court concluded that Dokes was a party to the indemnity agreement, Clients would in essence be suing themselves. Conceptually, if the indemnity agreement covered any lawsuit under any theory, then even if Clients proved that Joe Dokes had committed fraud, they would be required to pay the damages and the attorney fees incurred by Dokes.

In reality, case law holds that an indemnity agreement is invalid if it creates that sort of situation and prevents a party from seeking any meaningful recompense for the wrongs of the other party to the agreement, but I’m just discussing broad concepts at this point.

So back to the attorney for Joe Dokes. He probably knew he’d have a hard time bringing his client under the terms of the indemnity agreement, but that was a problem for another day. He wanted Clients to have some skin in the game in their lawsuit against Joe Dokes, no doubt thinking that would provide some settlement leverage.

But if the attorney had stepped back and taken a moment to reflect, he would have realized that Dokes’ entire action arose from Clients’ cross-complaint. In other words, he was seeking “damages” as a result of being sued by Clients for fraud. Under section 425.16(e), a claim for relief filed in court is a protected activity. (Navellier, 29 Cal.4th at p. 90; Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115.) Protected activity includes the filing and prosecution of lawsuits. (Takhar v.People ex rel. Feather River Air Quality Management Dist. (2018) 27 Cal.App.5th 15, 27 – 28.)

Thus, all of the claims by Joe Dokes fell under the anti-SLAPP statute.

If counsel for Dokes considered the anti-SLAPP statute at all, he probably realized this fact, but immediately dismissed any concerns because if Dokes was a party to the indemnity agreement, then certainly he is permitted to sue on that indemnity agreement.

If he was familiar with anti-SLAPP law, his thought process might have gone one step further. He might have reasoned that since the plaintiff’s evidence (here, the cross-complainant) must be taken as true for purposes of the anti-SLAPP motion, he could overcome any anti-SLAPP motion by simply providing a declaration from his client attesting to the fact that he was a party to the indemnity agreement.

“How could he do that?” you may ask. “Won’t it be as simple as looking at the signature lines on the indemnity agreement to determine who is a party to the agreement?” Thank you for engaging.

You have just identified a common pitfall that snares some attorneys. While it is true that the plaintiff’s evidence is taken as true, the plaintiff can’t just attest to ultimate conclusions of law. If the anti-SLAPP motion arises from a breach of contract, the plaintiff can’t just attest that what he did was not a breach. And while a plaintiff is free to argue that as an employee of the corporation he is covered by the indemnity agreement, that is not evidence and need not be taken as true.

But that is exactly what Joe Dokes attempted here. Even though he attested that he was the sole shareholder and principal of Joe Dokes, Inc., and had alleged in the original complaint that the agreement was between Clients and Joe Dokes, Inc., in opposition to the anti-SLAPP motion he attested that he was actually the signator to the agreement. I think in his mind he was creating a Gordian knot that the court would find impossible to untie, with the individual and the corporation both claiming to be the parties to the agreement, and the court having to accept both claims as true.

The court saw through this, and properly treated the anti-SLAPP motion as the evidentiary hearing that it is. Dokes was required to present sufficient evidence to show that he was more likely than not to prevail on his claims, and had utterly failed to do so since he was not a party to the indemnity agreement:

Joe Dokes is not a party to, or a third-party beneficiary of, the agreement that contains the indemnity provisions; thus, Dokes cannot obtain relief based thereupon. (Civ. Code. §§ 1558, 1559; Eastern Aviation Group, Inc. v. Airborne Express, Inc. (1992) 6 Cal.App.4th 1448, 1452; Johnson v. Holmes Tuttle Lincoln-Mercury, Inc. (1958), 160 Cal. App. 2d 290, 297 [“The test for determining whether a contract was made for benefit of a third person is whether an intent to benefit a third person appears from the terms of the contract.”].

The court granted our anti-SLAPP motion, striking the cross-complaint in full, and entitling us to recovery of our clients’ attorney fees. A much better, and faster, result than proceeding by way of a motion for summary judgment.

When reviewing a complaint and strategizing how best to respond, keep the anti-SLAPP analysis in mind. If plaintiff is alleging some novel theory that will be impossible to prove, you may well have the makings of an anti-SLAPP motion, with the second prong acting as a de facto summary judgment motion. Just be mindful that plaintiff’s evidence is taken as true, and consider what evidence plaintiff will be able to present.

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Negligent Infliction of Emotional Distress (NIED):

I used a claim for NIED as an example of a cause of action that will almost always fail to satisfy the second prong of the anti-SLAPP analysis. Given how often I see that alleged as a claim, I know that many will be surprised to hear that it is not an independent cause of action, and therefore provide the following authority.

Here is how the claim normally arises. The defendant has engaged in speech or conduct that is protected under the anti-SLAPP statute and Civil Code section 47. The plaintiff finds that protected conduct to be problematic and sues, asserting a claim for Intentional Infliction of Emotional Distress (IIED). While drafting the complaint, the attorney thinks, “I may not be able to prove that the defendant did what he did to intentionally inflict emotional distress, so I’d better add a claim for Negligent Infliction of Emotional Distress as well.” Also, a claim based in negligence has the added benefit of possibly triggering insurance coverage.

The situation I see most is where the defendant reported the plaintiff to the police, so the plaintiff sues, claiming that the report to the police was false and defamatory, and caused him emotional distress. Word is spreading that Civil Code section 47(b) was amended in 2021, to allow civil actions for false reports to the police, and attorneys now sue on that basis, without sufficient consideration of the showing that is required. Reports to the police are still privileged, and cannot be the basis for a civil action unless it can be shown that the defendant knew the report was false, or acted with reckless disregard for the truth. That is a tough burden to meet. It is not enough to simply show that the defendant was wrong.

In a recent case, following a child’s visit to the non-custodial parent (wife) and her boyfriend, my client (father) called the police to relate some disturbing information provided by the child. After an investigation by Child Protective Services, no action was taken. Wife took this to mean that the report was false, and sued for defamation, IIED, and NIED.

Can you spot the fatal flaw? The father wasn’t accusing anyone of anything; he was merely reporting what the child had said. No evidence could be presented to prove that the report to the police was knowingly false (unless it could be shown that the child had not said anything). Reports to the police automatically satisfy the first prong of the anti-SLAPP analysis, and plaintiff could offer no evidence that would take the calls to the police out of that privilege. Our anti-SLAPP motion was granted.

And as to the claim for NIED, it would never stand in any event. “[T]he California Supreme Court has emphasized that “there is no independent tort of negligent infliction of emotional distress.” Gu v. BMW of N. Am., LLC (2005) 132 Cal.App.4th 195, 204 (quoting Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 984); Burgess v. Superior Court (1992) 2 Cal.4th 1064, 1072; Christensen v. Superior Court (1991) 54 Cal.3d 868, 884. Instead, “the tort is negligence, a cause of action in which duty to the plaintiff is an essential element.” Potter, supra, 6 Cal.4th at 984. However, “there is no duty to avoid negligently causing emotional distress to another, …” Potter, 6 Cal.4th at 984. Thus, “unless the defendant has assumed a duty to plaintiff in which the emotional condition of the plaintiff is an object, recovery is available only if the emotional distress arises out of the defendant’s breach of some other legal duty and the emotional distress is proximately caused by that breach of duty.” Id. at 985; Erlich v. Menezes (1999) 21 Cal.4th 543, 555.