Slapping Down SLAPP Suits
By Michael C. Denison
Edited by Peg Healy
Category: SLAPP Lawsuits
The right to free speech and petition is a cornerstone of our Constitution. It is no surprise that, after an influx of meritless suits aimed at chilling the exercise of these rights, the California Legislature responded in 1992 by enacting Code of Civil Procedure section 425.16, commonly referred to as the anti-SLAPP statute. (SLAPP means "strategic lawsuit against public participation," which is primarily a nuisance suit brought to harass a principal in another disagreement, whether a lawsuit, administrative hearing, or public debate.) This statute allows a defendant an early offensive weapon against such suits under certain conditions.
The Legislature expressly provided that the anti-SLAPP statute "shall be construed broadly." CCP §425.16(a). Despite dozens of opinions on the statute so far, questions still remain: How broad is broad, and does the statute apply to all lawsuits that are based on previous underlying lawsuits? Although the courts have addressed many issues relating to the statute, the statute's application continues to be dictated by the arguments of creative counsel and the limits imposed by trial judges.
The anti-SLAPP statute permits a special motion to strike any cause of action against a person "arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue," which will be granted unless the court determines that the plaintiff has established a "probability that the plaintiff will prevail on the claim." CCP §425.16(b)(1). The special motion to strike is typically filed within 60 days of the service of the complaint, although in the court's discretion it can be filed at a later time on terms the court deems proper. CCP §425.16(f). The motion thus forces the plaintiff to come forward early in the action with evidence establishing the probability of the plaintiff's ultimate success. The word complaint as used in the statute has been held to include amended complaints as well. Yu v. Signet Bank/Virginia (2002) 103CA4th 298, 315.
The defendant, as moving party, bears a threshold burden of making a prima facie showing that the plaintiff's cause of action arises from the defendant's free speech or petition activity. Dowling v Zimmerman (2001) 85 CA4th 1400, 1417. The moving party can meet this burden by showing that the act forming the basis for the plaintiff's cause of action falls within one of the four categories of conduct described in section 425.16(e): written or oral expressions made (1) before an official body, (2) in connection with an issue under consideration by an official body, or (3) in a public forum about a matter of public interest; or (4) any other conduct furthering petition or free speech connected to a public issue or interest.
The California Supreme Court has provided some guidance as to these four categories, holding that the element of "public interest" is not required under subsection (1) for "any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law," or under subsection (2) for "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." Briggs v Eden Council for Hope and Opportunity (1999) 19 C4th 1106, 1123.
In contrast, a public interest showing is required under subsection (3) for "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," or subsection (4) for "any other conduct in furtherance of the exercise of the constitutional right of petition or ... free speech in connection with a public issue or an issue of public interest." An argument could be made that the public interest showing should not apply to conduct in furtherance of the right to petition under subsection (4) for the same reasons applicable to subsections (1) and (2).
Subsections (3) and (4) clearly apply to actions arising from allegedly defamatory statements made in political campaigns by politicians and their supporters, including statements made in campaign literature. Rosenaur v Scherer (2001) 105 Cal Rptr 2d 674, 683.
Subsection (1) and subsection (2) thus include "any written or oral statement or writing ... made before ... a judicial proceeding," or "made in connection with an issue under consideration or review by a ... judicial body." Since suits based on statements made before a judicial body or in a judicial proceeding do not require a public interest showing, virtually any lawsuit that is based on an underlying lawsuit should be a SLAPP suit.
The most obvious example would be a malicious prosecution cause of action based on a civil proceeding, which requires an underlying civil lawsuit that was terminated in the previous defendant's favor. Sheldon Appel Co. v Albert & Oliker (1989) 47 C3d 863, 871. The defendants in the malicious prosecution action (the plaintiff and the attorneys in the underlying action) should be able to file a special motion to strike under the anti-SLAPP statute.
Although this is a logical application of the statute, no published appellate opinion so far has said whether the anti-SLAPP suit applies to malicious prosecution cases. The author's informal review of superior court orders from four counties shows that trial courts do not agree on this issue. Attorneys are required by statute (CCP §425.16(k)(1)) to send information regarding all special motions to strike, oppositions, and resulting orders to the Judicial Council. Its webpage listing these motions is a useful place to start research on local results (www.courtinfo.ca.gov/reference/slapp.htm).
Just after the statute was passed, there was much discussion devoted to why the anti-SLAPP statute should apply to malicious prosecution cases. That discussion was rendered moot by the California Supreme court so holding. Jarrow Formulas Inc. v. LaMarche (2003) 31C4th 728.
After the special motion is filed, all discovery proceedings in the action are stayed, and the stay remains in effect until the court rules on the motion. CCP §425.16(g). The unlimited "all" suggests that no discovery can be taken by any party in the lawsuit until the motion is resolved. Since many lawsuits involve multiple parties and often cross-complaints, that may be a harsh result for a plaintiff in an action in which there are multiple defendants, some of whom are not moving parties. It also may be a harsh result regarding discovery between defendants who also are cross-complainants, and their cross-defendants. A fairer interpretation would be that discovery may continue, except between the plaintiff and moving defendants. However, no published case has settled this issue.
Subdivision (g) does allow "specified discovery" if permitted by the court "on noticed motion and for good cause shown." As to discovery between parties other than plaintiff and moving defendant, such a motion logically would be granted. However, since the anti-SLAPP motion must be heard within 30 days of service unless the docket conditions require otherwise (CCP §425.16(f)), the stay is likely to be lifted by a ruling on the anti-SLAPP motion before the discovery motion could be heard anyway, which may explain why the issue has not reached the appellate court.
If a special motion to strike is granted, attorneys fees are mandated for the prevailing defendant. If the motion is denied, attorneys fees can only be awarded to the prevailing plaintiff if the court finds that the special motion was "frivolous or is solely intended to cause unnecessary delay." CCP §425.16(c). Defendants should thus be particularly careful to avoid the appearance of bringing the special motion just to cause delay.
In the Dowling case, the court of appeal addressed three issues relating to attorneys fees and appeals of anti-SLAPP motions. First, a prevailing defendant on an anti-SLAPP motion is entitled to reasonable attorneys fees, even if the defendant first appeared in propria persona and later retained an attorney on a contingent-fee agreement to bring the motion. 85 CA4th at 1425. (The Rosenaur court expanded on this concept by permitting attorneys fees even though they had not been "incurred" under the fee agreement, which was on a partial pro bono basis, because the attorney agreed to collect fees only on insurance or against the plaintiff if the motion were successful. 105 Cal Rptr 2d at 674.) Second, a prevailing defendant is also entitled to attorneys fees incurred on the appeal if the order granting the motion is upheld on appeal. Dowling, 85 CA4th at 1426; Rosenaur, 105 Cal Rptr 2d at 693. Third, the enforcement of the judgment for attorneys fees is not stayed pending the appeal, absent the filing of an appropriate appeal bond or other undertaking. Dowling, 85 CA4th at 1427.
The California Supreme Court recently reviewed the "lodestar adjustment" system of enhancement of attorneys fees that are awarded to a prevailing defendant on a special motion to strike. The court approved the use of a multiplier to increase the award to compensate for the risk assumed by the attorney in performing services on the special motion to strike, when the attorney has a contingency fee agreement. However, although fees can be awarded for pursuing the fee award, the court found that there was no contingency risk on the fee application, since at that point the attorneys fees were mandatory. It also held that a multiplier for the attorney's special expertise, in this case as an anti-SLAPP specialist, is improper if that expertise was already reflected in the attorney's hourly rate, which was the basis for the "lodestar" used in fee calculations. Ketchum v Moses (2001) 24 C4th 1122, 1141-1142.
One remaining issue is the provision for automatic appeal of an order granting or denying a special motion to strike (CCP §425.16(j)). Does this statute apply if the motion is denied on the ground that the statute never applies to the type of case filed? A broad interpretation of the statute would indicate an affirmative answer. Although not directly on point, one court recently stated without discussion that the denial order is appealable. An insurance company sued defendants who had prepared earthquake damage estimates and expert reports that supported allegedly fraudulent insurance claims. Although some of the reports were eventually used in official proceedings and litigation, the defendants lost their anti-SLAPP motion. The appellate court agreed that the statute did not apply because the reports were not created "before" or "in connection with an issue under consideration or review by" an official body or proceeding, and the defendants had failed to show that the causes of action in the lawsuit otherwise arose from free speech or petition activity. People ex rel 20th Century Ins. Co. v Building Permit Consultants, Inc. (2000) 86 CA4th 280, 281.
Valid Exercise of Rights
In the anti-SLAPP statute's preamble, the Legislature referred to "lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." CCP §425.16(a). The Briggs court directed that legislative intent must be determined from the whole statute and not solely from the preamble. Nevertheless, another court relied on the appearance of the word valid in the preamble to reverse the grant of an anti-SLAPP motion. In Paul for Council v Hanyecz (2001) 85 CA4th 1356, an unsuccessful political candidate sued several individuals who had illegally laundered campaign contributions for his opponent. The trial court granted the defendants' anti-SLAPP motion and awarded attorneys fees to the prevailing defendants. The court of appeal reversed both orders based on the fact that the illegal campaign money laundering was essentially admitted to by the defendants. It concluded, as a matter of law, that such activities were not a valid exercise of constitutional rights, despite the fact that "it is technically true that laundering campaign contributions is an act in furtherance of the giving of such contributions, that is, in furtherance of an act of free speech.... However, had there been a factual dispute as to the legality of defendants' actions, then we could not so easily have disposed of defendants' motion." 85 CA4th at 1367 (emphasis added).
Anti-SLAPP motions are generally filed within 60 days of service of the complaint. CCP §425.16(f). In contrast, summary judgment motions cannot be filed until 60 days after the general appearance of each defendant. CCP §437c(a). A successful anti-SLAPP motion should thus precede and obviate summary judgment. In one procedurally unique case, however, a defendant's anti-SLAPP motion was taken under submission and later mooted by the grant of summary judgment for plaintiffs. City of San Diego v Dunkl (2001) 86 CA4th 384. As a result, the plaintiff lost the opportunity for attorneys fees that might have been awarded if the anti-SLAPP motion had been denied before summary judgment was granted.
The anti-SLAPP statute has arisen in another summary judgment context as well. One court held, over a spirited dissent, that the denial of an anti-SLAPP motion on the merits in an underlying action established probable cause for bringing the underlying action, which defeated a later malicious prosecution action. Wilson v Parker, Covert & Chidester (2001) 87 CA4th 1337, 1344 (demurrer granted without leave to amend). Thus, the viability of a future malicious prosecution motion may be at stake and should be considered before a defendant brings an anti-SLAPP motion.
Michael C. Denison specializes in civil litigation, including the defense of legal malpractice and malicious prosecution cases, at Towle Denison Smith & Tavera in Los Angeles.
Article updated: January 2004