Posts Tagged ‘anti-SLAPP’

C.A. Says Ex-Employee’s Settlement Demand Was Extortion

A fired worker who sued his ex-employer for defamation and wrongful termination committed extortion when he threatened to instigate a federal investigation of the company’s business practices if his demands were not met, the Sixth District Court of Appeal ruled. Read the rest of this entry »

Morris & Stone Victory – Reducing Attorney Fees

Inflated Fee Applications

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 »

Show Some Love for California’s Anti-SLAPP Statute

A real Jones for the Basketball coach

Not the coach in question.

I get frequent calls from people who have run afoul of the anti-SLAPP statute, basically asking, “what can we do about this terrible law?”

Here’s the deal. Every law eventually gets subverted. The Americans With Disabilities Act sounded like a great idea, but then you ended up with attorneys who use it as an extortion racket, forcing fast food restaurants to pay thousands because a counter was 17 ½ inches high instead of 18.

So it is with California’s anti-SLAPP statute. It is a great statute, and for the most part attorneys have not found an effective way to misuse it, except for right to appeal an adverse decision, which many now use as a delaying tactic. Opposing counsel in one of my cases recently brought a motion for permission to file a very late (by two years) anti-SLAPP motion on the eve of trial, and when the motion was quite properly denied, then filed an appeal from that denial. Of course I had no difficulty getting the Court of Appeal to dismiss the frivolous appeal, but it delayed the trial a month. Except for this type of abuse, in most other regards California’s anti-SLAPP law provides a very useful tool to get rid of lawsuits designed to silence free speech or frustrate the right of redress.

However, in case you still have it out for California’s anti-SLAPP law, I bring you an example out of Illinois that should make you feel a little better. California pioneered the anti-SLAPP concept, and most states have used that law as a template, but that hasn’t prevented some from coming up with their own strange hybrids.

Enter the case of Steve Sandholm, a high school basketball coach/athletic director in Illinois. In the case of Sandholm v. Kuecker, some parents decided they didn’t like Sandholm’s coaching style, so they really went after him, hoping to get him replaced. They posted useful, positive comments such as “[he is] a psycho nut who talks in circles and is only coaching for his glory.” The efforts were to no avail, because the school board decided to keep him. However that decision only fanned the flames, and the parents kept up their campaign. Sandholm found some of the statements to be defamatory, so he brought a defamation action.

But wait. Illinois has an anti-SLAPP statute that states that speech and petition activities are “immune from liability, regardless of intent or purpose, except when not genuinely aimed at procuring favorable government action, result, or outcome.” Wow that’s a broad standard. A school district is a government entity, and the parents were trying to get that government entity to do something (removing the coach), so did that fall under Illinois’ anti-SLAPP statute? If I read the statute correctly, that means that even if the parents got together and decided to fabricate lies about the coach, they are immune from a defamation action so long as those lies were “genuinely aimed at procuring a favorable government . . . outcome.” (I’m not saying that happened, I’m only using the case to present a hypothetical.) And how in the world is a court going to determine if the actions were “genuine”?

Incredibly, that’s exactly how the Court of Appeal interpreted the statute. Read this excellent summary of the case by John Sharkey to see just how convoluted the anti-SLAPP process can become.

Anonymous Blogger Turns Case International, and Results in Anti-SLAPP Motion

International Anti-SLAPP MotionAn international defamation action has ended up here in California. Out of the UK, Tyneside councillors (that’s the way they spell it over there) are very upset that an anonymous blogger who calls himself “Mr. Monkey” has been defaming them.

The council has backed a three-year hunt to discover the identity of Mr. Monkey, with the legal fees now exceeding six figures. So far, since they did not retain Morris & Stone, the attempts to uncover the identity of Mr. Monkey have been unsuccessful.

Enter Coun Ahmed Khan, a councillor from a rival political party. The four plaintiff councillors successfully moved to have Khan’s personal computer records disclosed, because they apparently suspected him of being Mr. Monkey. Khan denies that he is the primate in question, but has cried “enough is enough,” and wants to put an end to the search.

To that end, he brought what I can only characterize as an offensive anti-SLAPP motion (not offensive as in crude, but as in the opposite of defensive). He intervened in the San Mateo Superior Court action and filed an anti-SLAPP motion, asserting that even though he is not Mr. Monkey, the comments of Mr. Monkey are protected and the action should therefore be dismissed.

Motion DENIED. Indeed, the court found the motion to be so frivolous that it awarded attorney fees of £40,000 to the plaintiffs. (I once obtained a judgment in Los Angeles Superior Court in British pounds. It’s worth it just to see the court clerks try to figure out how to enter it into the system and calculate interest and the like.)

Khan has now appealed the denial of his anti-SLAPP motion and the award of attorney fees.

Sending Demand Letter Out of State Can be Problematic

Anti-SLAPP Motion by Attorney

How Matabolic views the case

The case of Metabolic Research, Inc. v. Scott J. Ferrell, et al. is turning out to be a fascinating case on several levels, including liability considerations for attorneys and SLAPP issues. Briefly, here are the facts as set forth in a recent opinion of the Ninth Circuit Court of Appeals.

Scott J. Ferrell is an attorney practicing in Orange County, California. He apparently believes that a supplement being made by Metabolic and sold by GNC (Stemulite) is bad stuff. To that end, he sent demand letters to Metabolic and GNC in Pennsylvania and Nevada, accusing them of violating the California Consumer Legal Remedies Act by way of false advertising, and threatening to sue them (presumably in California)* if they did not stop their (allegedly) evil ways and agree to an injunction to that effect.

In California, Ferrell’s letter would likely have been determined to be part of the litigation process and therefore protected, UNLESS it was deemed to be extortion. (See Flately v. Mauro.) In California, the issue would have proved very interesting, because while Ferrell was not demanding any money, the hallmark of true extortion, the injunction he was demanding was so onerous – including a requirement that all profits be disgorged – that Metabolic claimed it would have put it out of business. Nonetheless, in California it might have been decided that the letters did not cross the line, and Ferrell would have been safe from suit.

But Ferrell’s letters were sent outside of California. In November 2009 Metabolic filed a lawsuit in Nevada State Court against Ferrell, charging extortion and racketeering based on his demand letter. Ferrell removed the case to Federal Court (I never would have done that for the reasons that follow), and then brought a motion to dismiss based upon Nevada’s anti-SLAPP statute, claiming that the lawsuit amounted to a SLAPP because it was suing him for engaging in litigation.

Motion DENIED. The District Court found that “Nevada’s anti-SLAPP legislation only protected communications made directly to a governmental agency and did not protect a demand letter sent to a potential defendant in litigation.” Again, as would be appropriate in California but not necessarily elsewhere, Ferrell took an immediate appeal.

Appeal DENIED. Federal courts do not like interlocutory appeals, and will find a way to reject them. The court did an in-depth review of Nevada’s anti-SLAPP statute, and concluded there was no right of immediate review of a denial of an anti-SLAPP motion. The court referred to this as a “run of the mill anti-SLAPP motion” (ouch), and held that a District Court judge affords sufficient safeguards to protect defendants from SLAPP actions without the added protection of an immediate appeal. However, to twist the knife a little, the Ninth Circuit threw in that Ferrell could have proceeded by way of a writ of mandamus, and that it was offering “no opinion on how we might have decided” such an application had it been pursued.

Lesson 1: Consider that when you send a demand letter out of State, you may be subjecting yourself to an action in that jurisdiction.

Lesson 2: (And I have seen this over and over) Don’t remove a case to Federal court just because you can. The motion may well have been decided the same way in State court, but I would not have wanted it decided there.

* That’s not me presuming, the court opinion used those words.

District of Columbia Struggling With Anti-SLAPP Law

The District of Columbia instituted an anti-SLAPP procedure back in March but the judges are having a heck of a time figuring it out. (Don’t feel bad D.C., California has had a SLAPP statute since 1992, and some judges still don’t get it.)

Judge Rufus G. King III of the D.C. Superior Court got it right. A local television station did a report on the ridiculous amounts of overtime that was being paid to certain government officials. In one reported case of a fire department Lieutenant, his annual salary was $90,000 but he had earned as much as $119,000 in overtime pay one year.

That Lieutenant took exception with the fact that the news story had used terms like “racked up” and “month after month”, claiming those statements were defamatory. His attorney apparently failed to explain or he refused to understand that only the “gist” of the statement need be true in order to defeat a defamation action, so he filed a defamation action against the television station, and the station quite properly brought an anti-SLAPP motion.

Judge King ruled that the report was a matter of public interest and therefore fell under the anti-SLAPP statute, and that the Lieutenant failed to demonstrate a likelihood that he could establish damages. Motion GRANTED, case DISMISSED. Good job D.C.

But then there was Judge Richard Leon. You may recall that a U.S. Department of Agriculture official named Shirley Sherrod left her job after a video was released, seemingly showing her confessing to discriminating against white farmers. It later came to light that the comments were arguably taken out of context due to the editing of the video. Sherrod didn’t appreciate that, and sued blogger Andres Breitbart, among others, asserting in her complaint that the “deceptively edited” clip constituted defamation. Breitbart responded by bringing an anti-SLAPP motion, asserting that the posting of the clip was an act of protected speech.

Sure sounds like a SLAPP to me, but Judge Leon denied the motion out-of-hand with only a two sentence order. The U.S. Court of Appeals for the D.C. Circuit was stumped by that one as well, and today ordered Judge Leon to explain himself.

Less than a week ago, Judge Robert L. Wilkins out of the U.S. District Court for the District of Columbia was not nearly as concise as Judge Leon, and issued a 55-page opinion denying an anti-SLAPP motion, finding “that the special motion to dismiss procedure under the Anti-SLAPP Act does not apply to a federal court sitting in diversity.”


Courts Expressing Frustration Over Automatic Right to Appeal SLAPP Rulings

The anti-SLAPP process was intended to provide a quick, hopefully inexpensive means by which defendants, who were being sued in an effort to silence their free speech or right of redress, could dispose of such actions. But given time, attorneys and their clients will find a way to subvert almost any well-intentioned law. The American with Disabilities Act is another such example, where a law intended to prevent discrimination against the disabled morphed into an extortion racket by attorneys.

I have no involvement in the following case, and offer no opinion as to whether the anti-SLAPP process was abused, but the Court of Appeal cites it as a compelling reason why the legislature needs to consider whether the automatic right to appeal an anti-SLAPP ruling was such a good idea.

Here are the facts. A plaintiff in the San Francisco area sued for defamation for statements published in the Pujab Times. The matter dragged on for years, and in the third year some of the Defendants brought an anti-SLAPP motion, even though an earlier anti-SLAPP motion by different defendants had already been denied on the grounds that the Plaintiff was likely to prevail. The trial court again denied the motion, but the defendants appealed that ruling.

In affirming the trial court’s denial of the anti-SLAPP motion, the Court of Appeal stated:

We review the matter de novo, and we affirm, doing so without adding to the burgeoning California jurisprudence as to what is, or is not, an “issue of public interest.” For, such issue or not, plaintiff has met his burden under the anti-SLAPP statute-as the Jammu defendants essentially conceded. And we affirm with the observation that, however efficacious the anti-SLAPP procedure may be in the right case, it can be badly abused in the wrong one, resulting in substantial cost-and prejudicial delay. It is time for plaintiff’s case to be heard on the merits. Perhaps it is also time for the Legislature to revisit whether a defendant losing an anti-SLAPP motion has an absolute right to appeal.

In it’s decision, the Court discusses the history of the anti-SLAPP statute at length, including the amendment that was made in order to clear up confusion over what constituted a matter of “public interest”.

Shortly after this amendment, the Supreme Court decided Briggs, holding that an anti-SLAPP motion brought under section 425.16, subdivisions (e)(1) and (2) did not need to show that the statement concerned an issue of public significance. Doing so, the court expressly relied on the newly added language that section 425.16 “shall be construed broadly.” ( Briggs, supra, 19 Cal.4th at p. 1119, 81 Cal.Rptr.2d 471, 969 P.2d 564.) Interestingly-if not presciently-the majority opinion ends with the observation that “[i]f we today mistake the Legislature’s intention, the Legislature may easily amend the statute.” ( Id. at p. 1123, 81 Cal.Rptr.2d 471, 969 P.2d 564.) In dissent, Justice Baxter expressed concern that “[t]he majority’s holding expands the definition of a SLAPP suit to include a potentially huge number of cases, thereby making the special motion to strike available in an untold number of legal actions that will bear no resemblance to the paradigm retaliatory SLAPP suit to which the remedial legislation was specifically addressed.” ( Id. at p. 1129, 81 Cal.Rptr.2d 471, 969 P.2d 564 (conc. & dis. opn. of Baxter, J.).)

Whatever the reason, concern quickly galvanized in the direction that the anti-SLAPP statute was being misused. This concern immediately made its way to the Legislature, which in the 1999-2000 session, passed a bill precluding application of the anti-SLAPP statute to purely consumer interest actions. But Governor Davis vetoed the bill. This concern was resurrected in the 2003-2004 session, in Senate Bill 515,FN10 which passed, and became the new Code of Civil Procedure section 425.17, which begins with this observation: “The Legislature finds and declares that there has been a disturbing abuse of Section 425.16, the California Anti-SLAPP Law, which has undermined the exercise of the constitutional rights of freedom of speech and petition for the redress of grievances, contrary to the purpose and intent of Section 425.16.” (Stats.2003, ch. 338, § 1.)

Concern that the anti-SLAPP procedure was being abused also extended to the courts, where various justices expressed the concern in various ways. Comments in three cases illustrate the point.

Navallier v. Sletten, supra, 29 Cal.4th 82, 124 Cal.Rptr.2d 530, 52 P.3d 703, involved the issue whether a defendant’s having filed counterclaims in a prior, unrelated proceeding in federal court was one arising from “protected activity.” ( Id. at p. 85, 124 Cal.Rptr.2d 530, 52 P.3d 703.) A divided Supreme Court held that it was. Claiming that such holding was an unwarranted expansion of the anti-SLAPP law, dissenting Justice Brown, writing for herself and Justices Baxter and Chin, asserted that the majority’s “presumptive application of section 425.16 will burden parties with meritorious claims and chill parties with nonfrivolus ones.” And she added this flourish: “The cure has become the disease-SLAPP motions are now just the latest form of abusive litigation.” ( Navellier v. Sletten, supra, 29 Cal.4th at p. 96, 124 Cal.Rptr.2d 530, 52 P.3d 703 (dis. opn. of Brown, J.).)

Moore v. Shaw (2004) 116 Cal.App.4th 182, 10 Cal.Rptr.3d 154 was a defendant’s appeal from the denial of an anti-SLAPP motion. The Court of Appeal affirmed and, holding that the motion was frivolous, reversed the trial court’s denial of attorney fees to the plaintiff. Doing so, Presiding Justice Klein ended with this: “We cannot help but observe the increasing frequency with which anti-SLAPP motions are brought, imposing an added burden on opposing parties as well as the courts. While a special motion to strike is an appropriate screening mechanism to eliminate meritless litigation at an early stage, such motions should only be brought when they fit within the parameters of section 425.16.” ( Id. at p. 200, fn. 11, 10 Cal.Rptr.3d 154.)

Moran v. Endres (2006) 135 Cal.App.4th 952, 37 Cal.Rptr.3d 786was an appeal by defendants who had been denied attorney fees, which defendants had prevailed in obtaining dismissal of only “one of many causes of action,” ( id. at p. 953, 37 Cal.Rptr.3d 786) and that for conspiracy, which is not a cause of action in any event. ( Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511, 28 Cal.Rptr.2d 475, 869 P.2d 454.) Affirming the denial of attorney fees, an exasperated Justice Armstrong observed: “Section 425.16 was enacted because the Legislature found that ‘it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process.’ Neither the public’s nor defendant’s right to participate was advanced by this motion.” ( Moran v. Endres, supra, at p. 955, 37 Cal.Rptr.3d 786.) A concurring Justice Mosk added this: “Code of Civil Procedure section 425.16 … has resulted in numerous appeals that involve various ambiguities and apparent unintended consequences.” ( Id. at p. 956, 37 Cal.Rptr.3d 786 (conc. opn. of Mosk, J.).)

The obvious example is found in the numerous cases that involve complaints that simply do not “arise from” protected activity, but generate anti-SLAPP motions nevertheless. Examples include actions against attorneys. ( Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1539, 52 Cal.Rptr.3d 712 [” ‘garden variety’ attorney malpractice”]; Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, 1187, 20 Cal.Rptr.3d 621 [duty of loyalty]; Jesperson v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, 630, 7 Cal.Rptr.3d 715; Moore v. Shaw, supra, 116 Cal.App.4th 182, 10 Cal.Rptr.3d 154 [breach of trust]; Beech v. Harco National Ins. Co. (2003) 110 Cal.App.4th 82, 1 Cal.Rptr.3d 454 [failure to timely arbitrate].) And personal injury claims. ( Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 193, 6 Cal.Rptr.3d 494 [“garden variety personal injury claims” against dietary product manufacturer].) And insurance coverage cases. ( State Farm General Ins. Co. v. Majorino (2002) 99 Cal.App.4th 974, 975, 121 Cal.Rptr.2d 719 [declaratory relief action to resolve coverage issues].)

But another, and more subtle, abuse can be found in a case where the defendant could in good faith claim that plaintiff’s action arose from protected activity, and thus could meet the burden under step one of the anti-SLAPP analysis. But as seen, that is only the beginning. And suppose further that defendant (or defendant’s attorney) knows that the plaintiff could meet the burden under step two. Defendant nevertheless files the anti-SLAPP motion, knowing that it will cause plaintiff to expend thousands of dollars to oppose it, all the while causing plaintiff’s case, and ability to do discovery, to be stayed. Would this not constitute a misuse of the procedure? But even if it might not in the abstract, might it not here, where an earlier anti-SLAPP motion had been denied, the court expressly holding that plaintiff had met his burden under step two-a holding, not incidentally, made against three defendants who, unlike the Jammu defendants, were not even the publishers of the articles. We would say that this filing alone would be an abuse. And certainly when followed by the abuse coup de grâce-the appeal.

A Losing Defendant’s Right to Appeal Is the Aspect of the Anti-SLAPP Statute Most Subject to Abuse

As originally enacted, section 425.16 made no reference to appeal (though obviously a losing plaintiff whose case was stricken could appeal any judgment of dismissal). In 1999 subsection (j) was added to the statute, providing that “[a]n order granting or denying a special motion to strike shall be appealable under section 904.1.” FN14 (Stats.1999, ch. 960, § 1.)

The legislative history leading to subdivision (i) is not particularly illuminating, as shown by the brief discussion in the Senate Judiciary Report, which reads in its entirety as follows: “1. Stated need for legislation [¶] According to the proponents, this bill would further the purpose of the anti-SLAPP statute by allowing the defendant to immediately appeal a denial of a special motion to strike. Without this ability, a defendant will have to incur the cost of a lawsuit before having his or her right to free speech vindicated. [¶] The proponents contend that when a meritorious anti-SLAPP motion is denied, the defendant, under current law, has only two options. The first is to file a writ of appeal [ sic ], which is discretionary and rarely granted. The second is to defend the lawsuit. If the defendant wins, the anti-SLAPP statute is useless and has failed to protect the defendant’s constitutional rights. The proponents assert that since the right of petition and free speech expressly granted by the U.S. Constitution are at issue when these motions are filed, the defendant should have the immediate right to appeal and have the matter reviewed by a higher court. [¶] The author is submitting amendments in Committee to clarify that the right of appeal would apply to motions granted or denied in order to assure that both the plaintiff and defendant are given equal rights to appeal an adverse order.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 1675 (1999-2000 Reg. Sess.) as amended May 28, 1999, p. 3.)

The right of a defendant to appeal a losing anti-SLAPP motion quickly became, like so much else of the anti-SLAPP procedure, the subject of criticism. Indeed, such criticism was acknowledged by the Legislature itself in 2003 when, in discussing Senate Bill 515, the Senate Judiciary Committee noted the claim by the proponent of the bill “that current law is being used by defendants to unreasonably delay a case from being heard on the merits, thus adding litigation costs and making it more cumbersome for plaintiffs to pursue legitimate claims…. The filing of the meritless SLAPP motion by the defendant, even if denied by the court, is instantly appealable, which allows the defendant to continue its unlawful practice for up to two years, the time of the appeal.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 515 (2003-2004 Reg. Sess.) as amended May 1, 2003, pp. 11-12.) As enacted, section 425.17 expressly states that if a motion is denied based on that section, “the appeal provisions … of section 425.16 … do not apply.” (§ 425.17, subd. (e).) Unfortunately, section 425.16 was left untouched.

The concern about possible abuse of a losing defendant’s right to appeal caught the attention of the Supreme Court in Varian Medical Systems, Inc. v. Delfino, supra, 35 Cal.4th 180, 25 Cal.Rptr.3d 298, 106 P.3d 958. While holding that the defendant’s appeal stayed all proceedings in the trial court affecting the merits of the case, the court recognized the opportunity for abuse: “In light of our holding today, some anti-SLAPP appeals will undoubtedly delay litigation even though the appeal is frivolous or insubstantial. As the Court of Appeal observed and plaintiffs contend, such a result may encourage defendants to ‘misuse the [anti-SLAPP] motions to delay meritorious litigation or for other purely strategic purposes.’ ” ( Id. at p. 195, 25 Cal.Rptr.3d 298, 106 P.3d 958.)

Commenting on this in Olsen v. Harbison (2005) 134 Cal.App.4th 278, 283-284, 35 Cal.Rptr.3d 909 ( Olsen ), Justice Sims observed as follows: “Both the Legislature and the Supreme Court have acknowledged the ironic unintended consequence that anti-SLAPP procedures, enacted to curb abusive litigation, are also prone to abuse. As to abuse occasioned by the stay of proceedings on appeal of the denial of an anti-SLAPP motion, the Supreme Court has ‘encouraged’ us ‘to resolve these … appeals as expeditiously as possible. To this end, reviewing courts should dismiss frivolous appeals as soon as practicable and do everything in their power to ” ‘prevent … frustration of the relief granted.’ ” ‘ [Citation.]” (Fns.omitted.) Nothwithstanding our great respect for Justice Sims, such dismissal is easier said than done.

Olsen involved an appeal that claimed that the trial court abused its discretion in denying an anti-SLAPP motion that was clearly untimely, an appeal, Justice Sims rightly concluded, that indisputably had no merit. However, while ultimately dismissing the appeal, Justice Sims first recognized the “general rule” that a motion to dismiss should never be granted if ruling on the motion “requires a consideration of the merits.” ( Olsen, supra, at p. 284, 35 Cal.Rptr.3d 909, citing Reed v. Norman (1957) 48 Cal.2d 338, 342, 309 P.2d 809.) “The general rule is grounded on policies of avoiding double work by this court and avoiding unwarranted advancement of the case on calendar. (See 9 Witkin, Cal. Procedure [ (5th ed. 2010) ] Appeal, §§ [747-748], pp. [811-812].) The Supreme Court’s admonition for dispatch in Varian Medical Systems, Inc. v. Delfino, supra, 35 Cal.4th 180, 25 Cal.Rptr.3d 298, 106 P.3d 958, warrants an exception from the general rule here.” ( Olsen, supra, 134 Cal.App.4th at p. 284, fn. 5, 35 Cal.Rptr.3d 909). From there, Justice Sims went on to grant the motion to dismiss the appeal because it was “frivolous.” ( Olsen, supra, 134 Cal.App.4th at p. 280, 35 Cal.Rptr.3d 909.)

The decision ended with an appeal to the Legislature:

It is now almost five years since plaintiff filed his lawsuit, and trial is not yet in sight. Such delay hardly seems defensible, particularly when it is due in no small part to non-meritorious appeals by defendants who lost anti-SLAPP motions, the first appeal voluntarily dismissed after languishing for a long period (see fn. 2 ante ), and this appeal rejected as utterly without merit. As we said, something is wrong with this picture, and we hope the Legislature will see fit to change it.

A Primer on SLAPP Suits and Anti-SLAPP Motions

I routinely receive calls from parties and attorneys who have run afoul of California’s anti-SLAPP statute. It is clear that business people need to have at least a cursory understanding of what constitutes a SLAPP action before pursuing litigation, since it is equally clear that many attorneys are not conversant with this area of the law.

What is a SLAPP suit, and what is an anti-SLAPP motion?

A “SLAPP suit” is a lawsuit that is intended to censor, intimidate and silence critics by burdening them with the cost of a legal defense until they abandon their criticism or opposition. I use the expression Spurious Litigation Against Public Participation, since that better captures both the goal of the plaintiff and the nature of the lawsuit, but the standard verbiage is “strategic lawsuit against public participation”.

The action is spurious and frivolous because the typical SLAPP plaintiff does not care whether he wins the lawsuit, and often knows he has no chance of prevailing. The plaintiff’s goals are accomplished if the defendant succumbs to fear, intimidation, mounting legal costs or simple exhaustion and abandons the criticism. The heart of California’s anti-SLAPP legislation is set forth in subpart (e) of Code of Civil Procedure section 425.16, which provides:

(e) As used in this section, “act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue” includes:

(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law;

(2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law;

(3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest;

(4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.

To win an anti-SLAPP motion, the defendant must first show that the speech in question falls under one of the four sections set forth above. But that is just the first prong of the analysis. If the defendant proves the speech was protected, the plaintiff can show that he is still likely to prevail on the action. In other words, defamatory speech is not protected simply because it falls under one of the four sections.

So how do you know a SLAPP action when you see it? That is not always obvious, and as many attorneys and their clients have painfully learned, failing to recognize they have created a SLAPP can be extremely costly. One of my recent anti-SLAPP successes provides a good example of how an attorney can be caught in this trap.

I’ll Sue You if You Sue Me.

In this case, our (future) client had entered into a settlement agreement with the defendant in a prior action. The settlement agreement required the defendant company to pay damages to our client, and contained a confidentiality agreement. Two years after the settlement agreement was signed, the defendant had still not paid the damages to the plaintiff, so he retained our firm to sue to collect the money due under the agreement.

We filed the action for breach of contract, attaching a copy of the settlement agreement. The defendant answered the complaint and also filed a cross-complaint, claiming that it was a breach of the confidentially agreement to attach the settlement agreement to the complaint. Incidentally, counsel for defendant had discussed with me his intention to cross-complain on this basis, and I had warned him that would be a really bad idea. He did so anyway.

The reason the cross-complaint was a bad idea was because it was a SLAPP. Do you see why? Remember again what SLAPP stands for – Spurious Litigation Against Public Participation. Under section 42516(e)(1), “any . . . writing made before a . . . judicial proceeding” is an “act in furtherance of person’s right of petition.” Defendant had breached the settlement agreement, so clearly we were entitled to sue for breach of that contract. That is the public participation – taking a case before a court for redress of a grievance. By claiming that we had breached the agreement by attaching the confidential settlement agreement, Defendant was just suing our client for suing. Stated another way, the defendant company was in essence saying, “for daring to make our breach of the agreement public, I’m going to sue you.” I filed an anti-SLAPP motion against the company for the cross-complaint.

So let’s run this case through the two-prong, anti-SLAPP analysis. Our burden was to show that the speech was protected under the anti-SLAPP statute. The speech here was the complaint itself, with the settlement agreement attached. Filing a complaint is a specifically protected activity under the anti-SLAPP statute, and comments made in conjunction with litigation are protected under Section 47. There was no issue that our complaint was a protected activity.

That takes us to the second prong, by which the plaintiff, here the cross-complainant, must show a reasonable likelihood of success on the merits of the case, even if the speech is a protected activity. The company had failed to pay our client the money due under the agreement, so it was clearly in breach, and therefore could not possibly prevail on its own breach of contract claim, since one of the elements of a breach claim is performance.

The court granted our anti-SLAPP motion, to the utter shock of opposing counsel. Counsel had argued that the motion could not be granted because the facts were in dispute. He erroneously thought that, like a motion for summary judgment, the evidence cannot be weighed. But an anti-SLAPP motion is supported by evidence. We provided evidence that the money owed had never been paid, and there was no evidence that could be presented to the contrary.

The company must now pay all of our client’s attorney fees. Fortunately for the company, I am very efficient at these motions, but I have received calls from attorneys facing fees exceeding $100,000 after they unwittingly created a SLAPP action.

Bottom line for businesses: You probably have no desire to become acquainted with the minutia of California’s anti-SLAPP laws, but if you are going to be involved with any litigation, whether bringing or defending an action, the possibility of a SLAPP action needs to be on your mental checklist. As the above example illustrates, it may never be a thought to your attorney, and you will be the one to pay the price.

— Aaron Morris
Morris & Stone

Aaron Morris, Attorney
Aaron Morris
Morris & Stone, LLP

Orchard Technology Park
11 Orchard Road, Suite 106
Lake Forest, CA 92630

(714) 954-0700

Email Aaron Morris
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NOTICE PURSUANT TO BUSINESS & PROFESSIONS CODE SECTION 6158.3: The outcome of any case will depend on the facts specific to that case. Nothing contained in any portion of this web site should be taken as a representation of how your particular case would be concluded, or even that a case with similar facts will have a similar result. The result of any case discussed herein was dependent on the facts of that case, and the results will differ if based on different facts.

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