anti-SLAPP motions
SLAPP009 – Scope of Discovery after Anti-SLAPP Motion
It was a great anti-SLAPP week at Morris & Stone. Today we discuss two of our motions, and the result of last week’s Evil Yogurt Maker case. We will examine the scope of discovery following the filing of an anti-SLAPP motion, and apply those standards to a pending motion.
Specifically, I discuss the case of Britts v. Superior Court (2006) 145 Cal.App.4th 1112. In Britts, the defendant filed an anti-SLAPP motion on the same day that his opposition to a motion to compel was due. He argued that under the plain wording of CCP section 425.16(g), the motion stays all discovery “proceedings”, and therefore he was not required to file any opposition to the motion. The trial court disagreed, and granted the unopposed motion to compel, and awarded $5,000 in sanctions.
Britts took the matter up on a writ, and the Court of Appeal ordered the trial court to vacate the ruling on the motion to compel and for sanctions, holding that the statute means exactly what it says; an anti-SLAPP motion stops all discovery proceedings, including any pending discovery motions.
The trial court had also made a strange ruling (on an earlier anti-SLAPP motion in the case) that the defendant was not entitled to all the attorney fees incurred on the motion, because he had failed to meet and confer with opposing counsel. In other words, the court felt that if plaintiff’s counsel had simply been informed that one of the causes of action was a SLAPP, the complaint could have been amended and the motion avoided. That was not a holding from the case, but I explain why that reasoning is terrible and, if followed, could constitute malpractice.
I also discuss the case of Blanchard v. DirecTV (2004) 123 Cal.App.4th 903. In Blanchard, the court deliniated the scope of permissible discovery after an anti-SLAPP motion has been filed. As set forth in CCP section 425.16(g), a plaintiff must show good cause before taking ANY discovery after an anti-SLAPP motion has been filed. Good cause means ONLY discovery relevant to the Plaintiff’s burden of establishing a reasonable probability of prevailing on the claim. Discovery that is NOT relevant to a legal defense being asserted by the Defendant in the anti-SLAPP motion is not permitted.
Given that Blanchard permits only discovery related to potential defenses by the defendant, the case of Balzaga v. Fox News (2009) 173 Cal.App.4th 1325 came to the logical conclusion that if a plaintiff seeks leave to pursue discovery on a given defense, the defendant can prevent that discovery by informing the court that it is waiving that defense.
Finally, I discuss the case of Tutor-Saliba Corp v. Herrara (2006) 136 Cal.App.4th 604. This case sets forth the discretionary standard for granting leave to permit discovery following the filing of an anti-SLAPP motion, and held that a trial court’s decision to disallow discovery “will not be disturbed unless it is arbitrary, capricious, or patently ABSURD.” (Emphasis added.)
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SLAPPs: Birds do it, bees do it, even big law firms that should know better, do it.
I’m not so sure about that title, but it made me chuckle. The point of this article is that attorneys who create SLAPPs run the gamut, including large firms, who would presumably have an attorney or two who should know better. This latest case in my office is an object lesson as to how SLAPPs come about, and why the California’s SLAPP statute was such a great idea.
The case is the typical scenario where my client went off and started a business to compete with his former employer, and the former employer doesn’t like that one bit. The company sued, claiming the usual misappropriation of trade secrets, interference with prospective economic advantage and the like. My client cross-complained for breach of contract, because the company stopped paying certain significant residuals to which he is entitled. We will ultimately win, but the company is going to do what it’s going to do.
“Don’t you dare tell the world about how we’re going out of business.”
One thing it decided to do was to use the action to silence any criticism by my client. My client sent out a cautionary email to employees of the company, warning them about the shenanigans of the company. He explained that the company had not only breached contracts by cutting off his residuals, it had done the same to someone else. The email then directed the recipients to reports about the company published by Moody’s and Bloomberg, as well as press releases by the company itself, which all stated that the company is in some pretty dire financial straights.
He also sent out a press release, summarizing some events in the litigation. Specifically, when we took the deposition of the former vice president of the company, he took the Fifth and refused to answer any questions. The press release accurately reported those facts.
The company is represented by a law firm I had never heard of before this case, but according to its letterhead, it has some 30 offices, with five or six of them right here in California. It must be a pretty big firm.
The company and its attorneys apparently decided that while they were doing what they were going to do, my client is not allowed to tell anybody about the litigation or point to news stories about the finances of the company. They amended their complaint, adding four cause of action for libel, trade libel*, false advertising and unfair competition, all based on the email and the press release.
Under the heading of you can’t make this stuff up, here are some of the things they alleged were defamatory.
“It’s not 100% certain we are going to fail, it’s only close to 100%.”
My client provided a link to the article by Moody’s, and he said, “as one analyst says, the chances of [the company] defaulting on its [debts] is 100%.”
That’s defamatory, according to the complaint, because the analyst actually said, “the chances of [the company] defaulting on its [debts] is close to 100%.” So, apparently in opposing counsels’ world, that difference is defamatory because someone wanting to invest in the company would be put off by reading that the chance of default is 100%, but if they knew it was only “close to 100%” then they would be pulling out their checkbooks.
My client also wrote that his “complaint against [the company] alleges twelve causes of action, including . . . breach of the covenant of good faith and fair dealing . . . among others.”
Why is that defamatory? Because according to the complaint, my client did NOT file a complaint, he filed a CROSS-complaint, and the cause of action for breach of the covenant of good faith and fair dealing was thrown out on demurrer (before I was involved).
So, again, for that to have caused any loss of reputation, we have to assume that someone considering working for the company or investing in it would say, “I’m fine with a company that doesn’t pay its employees, so long as that’s only alleged in a cross-complaint, and so long as there is no cause of action for breach of the implied covenant. But if there’s a COMPLAINT that alleges breach of the implied covenant, the deal’s off!
This is the precise sort of case for which the anti-SLAPP statute was designed. In my never to be humble opinion, the causes of action were added purely out of a desire to gain leverage in the action, and a quick disposal of that sort of claim is the purpose of the anti-SLAPP statute. This was the quintessential SLAPP, and you are left scratching your head as to how a firm could have blundered into it, unless . . .
Crazy like a fox?
Since the SLAPP was so obvious, it has not escaped me that the firm may be crazy like a fox. It just smacks of a set-up. As stated, at the end of the day the company will be writing my client a substantial check. When I first came into the case, opposing counsel was fighting to postpone the trial, trying to put off that eventuality. It takes about six months to have a motion heard in this courtroom, and the judge does not move up motions on an ex parte application unless there has been a cancellation. If opposing counsel checked my background and saw that anti-SLAPPs are a big part of my practice, they may have filed an intentional SLAPP as a means to delay the action. That may seem crazy given the attorney fees that will come from the successful motion, but given the finances of the company, the goal might just be to push this case beyond a bankruptcy filing.
Still, I was recently retained to handle an appeal in a case where the judge improperly denied an anti-SLAPP motion, and then compuounded the error by refusing to give a jury instruction on protected speech. The jury awarded substantial damages based on protected speech. That case illustrates why it is crucial to get protected activities out of the action, even if it is clear that the plaintiff may have filed a SLAPP for purposes of delay.
*A rookie mistake to allege trade libel. It seldom makes sense to allege trade libel because the elements are far harder to meet than an action for libel, and it certainly doesn’t make sense to allege trade libel when you are already alleging libel.
SLAPP005 – Anti-SLAPP Decisions for First Quarter of 2014
We’re not even done with the fifth month of 2014, and California already has 12 reported decisions arising from anti-SLAPP appeals.
In the 5th Episode of the California SLAPP Law Podcast, we discuss four anti-SLAPP decisions.
Anti-SLAPP Decisions:
MORIARTY v. LARAMAR MANAGEMENT CORPORATION (2014) 224 Cal.App.4th 125 — A landlord-tenant case with no particular significance other than to show the displeasure of the Court of Appeal with frivolous anti-SLAPP appeals.
SCHWARZBURD v. KENSINGTON POLICE PROTECTION & COMMUNITY SERVICES DISTRICT BOARD (2014) — Cal.Rptr.3d —-, 2014 WL 1691562, 2014 Daily Journal D.A.R. 5470 — An action against a Police District that was decided on the basis of CCP section 425.17.
TOURGEMAN v. NELSON & KENNARD (2014) 222 Cal.App.4th 1447 — Another case decided under section 425.17, which discusses the burden of the plaintiff when seeking to apply that anti-SLAPP exception.
ROGER CLEVELAND GOLF COMPANY, INC. v. KRANE & SMITH, APC (2014) 225 Cal.App.4th 660 — Which discusses the statute of limitations for a malicious prosecution action (not as obvious as you my think), and analyzes and applies the anti-SLAPP statute.
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Anti-SLAPP Negotiations Yield Faster Recovery of Attorney Fees and Better Client Service
What is the purpose of an anti-SLAPP motion?
Contrary to the seeming belief of some attorneys, the purpose of is anti-SLAPP motion is not just to recover attorney fees. Of course you should seek attorney fees after a successful anti-SLAPP motion, but the purpose of the motion is to extract your client from a wrongful and harassing lawsuit as quickly as possible.
Indeed, in a perfect world, when your client was served with a SLAPP, you would contact opposing counsel, instruct them on the error of their ways, and get a dismissal without ever having to bring an anti-SLAPP motion. In the real world, that’s not normally a viable option. Putting the opposition on notice that they have filed a SLAPP could afford them the opportunity to amend in order to change the nature of the action. Your effort to avoid further litigation could actually result in your client being trapped in an action that could have been disposed of with the anti-SLAPP motion.
However, after the anti-SLAPP motion is filed, the negotiations to end the action can begin. I have been successful in this effort on at least two occasions that I recall. I contacted opposing counsel, informed him of the attorney fees that had been incurred to date, and afforded the opportunity to settle the matter for the payment of those fees and costs before the case went any further.
I recognize that this approach is antithetical to many attorneys, who view an anti-SLAPP motion as an opportunity to run up the attorney fees. However, if the matter can be resolved early on, even before significant attorney fees are incurred, then that is always in the best interests of the client. Read the rest of this entry »
Morris & Stone Victory – Reducing Attorney Fees
I am often brought in as an expert to oppose inflated attorney fee applications following an anti-SLAPP motion. Of course every case is different, but thus far I have never failed to get the requested fees reduced. Lest you be overly impressed, I will immediately note that I only handle a case if I agree that the attorney fees should be reduced. Sadly, there are far too many unethical attorneys who, after prevailing on an anti-SLAPP motion, view fee application as a winning lottery ticket, and greatly inflate the fees. In most instance my services are sorely needed to challenge the application, but there have been a few occasions where the fees being requested are reasonable in my opinion, and I inform the plaintiff and/or his attorney that I cannot opine that a reduction would be appropriate.
In today’s case, the fee application was of the all too common variety, where defense counsel grossly overstated the fees to which he felt entitled. In this case, the plaintiff had negligently filed a SLAPP, making the common mistake of seeking damages that flowed from fighting a legal action, claiming that the action was an “abuse of process.” When the defendant filed the anti-SLAPP motion, the plaintiff was educated as to the litigation privilege, and dismissed the challenged causes of action (others still remained). Rather than just bringing me in as an expert, the client decided to retain me to oppose the motion and prosecute the remaining causes. Read the rest of this entry »
SLAPP002 – Can Claims Against Lawyers Be Defeated with an Anti-SLAPP Motion?
In the last episode of the California SLAPP Law Podcast, I explained how crucial it is for every California litigator to understand this sweeping area of the law. There is virtually no litigation practice that won’t be impacted by the anti-SLAPP statutes.
If that was not persuasive enough, let me bring in a little closer to home. In today’s episode I discuss the common causes of action that are pursued against attorneys, and examine which of those have been found to fall under the anti-SLAPP statutes. Can claims against lawyers be defeated with anti-SLAPP motions?
Here are the cases discussed in today’s show:
BLEAVINS v. DEMAREST (2011) 196 Cal. App. 4th 1533; 127 Cal. Rptr. 3d 580.
In a neighbor dispute, court determined if a party to an action can sue the opposition’s attorney for malpractice.
OASIS WEST REALTY v. KENNETH GOLDMAN (2010) 182 Cal.App.4th 688; 106 Cal.Rptr. 3d 539
Does an attorney breach the duty of loyalty owed a former client when he or she actively takes a position against the former client on the same issue for which the lawyer previously had been retained, even though the lawyer is acting on his or her own behalf and there is no subsequent representation or employment?
KOLAR v. DONAHUE, MCINTOSH & HAMMERTON (2006) 145 Cal. App. 4th 1532
Holding that legal malpractice actions are categorically outside the reach of the anti-SLAPP statute.
ZAMOS v. STROUD (2003) 110 Cal.App.4th 60, 1 Cal.Rptr.3d 484
A malicious prosecution action can be based only on the filing of a lawsuit.
PEREGRINE FUNDING, INC. v. SHEPPARD MULLIN RICHTER & HAMPTON (2005) 133 Cal. App. 4th 658
Discusses breach of fiduciary duty action against law firm and the interplay of California’s SLAPP Law.
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Morris & Stone Anti-SLAPP Victory – Witness at EEOC Hearing Protected
Every week I get callers complaining about the anti-SLAPP statutes and/or the litigation privilege. The scenario is almost always the same. The caller sued someone for defamation for something they said in conjunction with litigation or an investigation by some government agency, and the caller was hit with an anti-SLAPP motion. The caller is outraged that the anti-SLAPP motion is keeping him from getting damages for the allegedly false statements made in court or court documents.
The outrage is misplaced, because the law is working properly by preventing the callers from doing what they are trying to do. The legal system cannot function without a litigation privilege. That privilege provides that anything said in conjunction with litigation is privileged, and cannot form the basis for a defamation action. And since the speech is privileged, a plaintiff can’t make an end run around the statute by just asserting different causes of action. I have written on this topic before, and the prior article shows what the justice system would be like without the litigation privilege.
Today I argued an anti-SLAPP motion in Los Angeles Superior Court, and the facts of the case provide a real life example of why the litigation privilege is so essential.
Let’s call the plaintiff in this case John. John decided one day that his employer was discriminating against him, and filed a complaint with the EEOC on that basis. There was then a dispute with his employer, with the employer saying John had violated a company policy and John denying that claim. The employer fired John for the alleged violation. John argued to the EEOC that the termination for the alleged violation was just more evidence of discrimination.
The EEOC investigated John’s claims of discrimination, and during that investigation interviewed our client, who also worked for the company. We’ll call him Dave. Read the rest of this entry »
Posted in Anti-SLAPP, anti-SLAPP motions, Case Results, Recent Cases, SLAPP, Victories | Tags: EEOC, Litigation Privilege | No Comments »
SLAPP001 – Why Every Litigator Must Know California SLAPP Law
California’s SLAPP Law provides for the use of special motions to strike, called “anti-SLAPP motions,” to quickly dispose of lawsuits that were filed only to improperly silence free speech or to prevent the defendant from pursuing a lawful legal remedy.
But as one person put it, the 15 Legislators who passed the law failed to consider the 4,000 attorneys who would interpret it. There is a dark side to California’s SLAPP Law. It trades one form of abuse for another. It was designed to protect free speech and the right of redress, but now it keeps some legitimate cases out of court because the risks are just too high. And with its automatic right of appeal, it is used to greatly delay trials. Any anti-SLAPP motion, no matter how ill-conceived, gives the defendant an automatic right of appeal. A defendant can therefore delay a trial for a year or more just by filing an anti-SLAPP motion.
Finally, with the right to attorney fees it provides, it provides unscrupulous attorneys with a mechanism that allows them to recover windfall fees.
With Episode 1 of the California SLAPP Law Podcast, I take you through the history of the anti-SLAPP statutes, and explain why every California litigator must be familiar with this law.
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Posted in Anti-SLAPP, anti-SLAPP motions, Case Results, Litigation, Podcast, Podcasts, Recent Cases | No Comments »
Anti-SLAPP Motions are Used For Just About Everything
This case is a few years old, but it illustrates how anti-SLAPP issues can come up in just about any context. In this entertaining case, Hallmark Cards published a card using Paris Hilton’s likeness, and her ridiculous tag-line, “that’s hot”.
Hilton sued for the unauthorized commercial use of her image and, incredibly, Hallmark brought an anti-SLAPP motion, claiming the card was a matter of public interest. The trial court denied the anti-SLAPP motion, finding the card and its speech was not a matter of public interest, and the Court of Appeals for the Ninth Circuit agreed.
“First, ‘public interest’ does not equate with mere curiosity. Second, a matter of public interest should be something of concern to a substantial number of people. Thus, a matter of concern to the speaker and a relatively small, specific audience is not a matter of public interest. Third, there should be some degree of closeness between the challenged statements and the asserted public interest; the assertion of a broad and amorphous public interest is not sufficient. Fourth, the focus of the speaker’s conduct should be the public interest rather than a mere effort to gather ammunition for another round of private controversy. Finally, … [a] person cannot turn otherwise private information into a matter of public interest simply by communicating it to a large number of people.”
Posted in Anti-SLAPP, Anti-SLAPP motion, anti-SLAPP motions, Case Results, Cases, Defamation, Defamation Solutions, Litigation, SLAPP | Tags: Paris Hilton SLAPP | No Comments »
Anti-SLAPP Victory — Shaheen Sadeghi v. Delilah Snell
I just wish counsel would run these cases past me before filing a defamation action. Here is a tale of a SLAPP that should have been spotted a mile away.
The tale starts with an article in OC Weekly. The article was about a guy named Shaheen Sadeghi. The article was extremely favorable to Sadeghi, referring to him as the “Curator of Cool” and discussing his amazing success in Orange County. OC Weekly even put his visage on the cover of the paper. Truly, it was a positive article that most would kill for.
But everyone has their detractors, and Sadeghi’s was a woman named Delilah Snell. After disclosing that Snell happens to be the girlfriend of a OC Weekly editor, the article reports on a dustup between Snell and Sadeghi, as told by Snell. Here is what the article said:
Still, some say Sadeghi will do whatever it takes to succeed. Delilah Snell, owner of Road Less Traveled, a shop in Santa Ana that sells environmentally friendly gifts and home goods, met with him in 2008 to discuss an opportunity to move to the Camp. (Full disclosure: Snell is the girlfriend of OC Weekly editor Gustavo Arellano.) She says the rent rate he gave was way too high, at least triple what she was paying, and she declined the offer. Then, she claims, he made a threat. “He basically said to me, ‘If you don’t move into my center, I will copy your business,'” she says.
Snell, co-founder of the Patchwork Indie Arts & Crafts Festival and a pioneer in Orange County’s eco-movement, believes her store is the model for the Camp’s SEED People’s Market, an airy, 12,000-square-foot gallery-type outlet that sells sustainable products and handmade crafts. Sadeghi owns the store with his wife, Linda. Snell claims that SEED has approached many of the vendors featured at Road Less Traveled and even used a photo of her shop in a promotional email sent out to customers. (The Weekly has a copy of the email.)
The article then goes on to tell Sadeghi’s side of the story:
Of Snell’s accusations, Sadeghi responds, “I think she’s full of it.” He says his business plan for SEED was dated “five years before she developed a business plan.”
“It’s a whole different store, whole different vibe,” he says, “and it has nothing to do with Road Less Traveled.”
The article then returns to singing the praises of Sadeghi, providing examples of how he is beloved by his tenants at his business centers like The Lab in Costa Mesa.
Sadeghi sued Snell in Orange County Superior Court, alleging in his complaint that Snell “orally accused Mr. Sadeghi of threatening to copy Ms. Snell’s business idea and plan if Ms. Snell did not move into Plaintiff’s retail center.” Sadeghi then alleged causes of action for slander, slander per se, libel, libel per se, invasion of privacy/false light, intentional interference with economic prospective advantage (sic), negligent interference with economic prospective advantage (sic), unfair competition, and injunctive relief. Whew! All arising from the statements Snell allegedly made to the OC Weekly, claiming that Sadeghi had said “If you don’t move into my center, I will copy your business.” Snell responded with an anti-SLAPP motion.
A quick aside to discuss the “Wall of Wrong”.
A potential client will call me, and during the call will tell me about 20 evil deeds committed by the defendant. In their mind, they have been horribly wronged, and they want to sue. Fair enough, but for a legal action each wrongful deed must be viewed independently to determine if it is actionable. I call the wrongful acts the “Wall of Wrong”, and each wrongful act is an item on that wall. (I considered calling it the Shelves of Wrong, but that didn’t seem as catchy.) I explain to the client that to determine if there is a case, we must walk up to the wall, take down each item and examine it independently to see if it will support an action. If not, it is tossed away never to be discussed again.
The reason this exercise is so important is because the client groups all the perceived wrongdoing together, and views it as a single act that certainly must support an action. But when all the conduct that does not support the action is stripped away, the client will often see that there is no action or that what is left remaining is pretty petty.
One more point to keep in mind in the defamation context is that just because something is false does not mean it is defamatory.
So let’s take Mr. Sadeghi to the Wall of Wrong to see if he has a case. Here, there are only two items to examine: (1) the claim that he was going to copy Snell’s business, and (2) that he pressured Snell to lease space in his center with the aforesaid threat. Let’s take those items off the shelf one at a time and decide if they will support a suit.
“I will copy your business.”
Sadeghi alleged that he never said he was going to copy Snell’s business. So, is it defamatory to falsely claim that someone said he was going to copy your business? Of course not. That statement, whether true or false, does not accuse Sadeghi of any wrongdoing. Imitation is the sincerest form of flattery. As the court put it in granting the anti-SLAPP motion, “Pepsi copies Coke. Gimbel’s Copies Macy’s. This is the nature of business.” Mr. Sadeghi, take that statement from the Wall of Wrong and never speak of it again.
Pressuring Snell to lease space.
Is it wrong to pressure someone to lease space in a mall? Of course not. But let’s refine that a little. Is it wrong to say you will copy someone’s business if they don’t lease space from you? Sometimes creating an analogous fact pattern makes it easier to analyze. Let’s say you have a chain of pizza restaurants, and a landlord comes to you and says, “we really want a pizza place like yours in our center, so we just want you to know that if you don’t lease the space, we’re going to create a pizza place just like yours for our center.”
Anything wrong with that? Sure, he’s pressuring you to rent the space with the threat of opening a competitor if you don’t, but that’s fair. When a landlord is looking for an anchor store in their mall, don’t you think they play Macy’s and Neiman Marcus off one another? Mr. Sadeghi, take that statement from the Wall of Wrong and never speak of it again.
So we are left with nothing on the Wall of Wrong, meaning that there is no case to pursue. This case should never have been filed, and the court properly granted the anti-SLAPP motion.
A SLAPP is not saved by numerous legal theories.
The other essential takeaway from this case is that nine causes of action do not a case make if the basis for the action is defective. In other words, if it was not defamatory for Snell to claim that Sadeghi said “If you don’t move into my center, I will copy your business,” then those words will not support any other legal theories like intentional infliction of emotional distress or unfair competition.
Posted in Anti-SLAPP, anti-SLAPP motions, Case Results, Cases, Defamation, Defamation Solutions, Libel, Litigation, Recent Cases, Slander, SLAPP, Victories | Tags: anti-SLAPP motion, Delilah Snell, Shaheen Sadeghi, Slander, Wall of Wrong | No Comments »
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