By Michael C. Denison
Edited by Peg Healy
Category: SLAPP Lawsuits
In 1992 the California Legislature enacted the anti-SLAPP statute now embodied in Code of Civil Procedure section 425.16. (SLAPP is an acronym for "strategic lawsuit against public participation." This statute provides defendants in certain cases with a unique method for challenging plaintiffs' evidence at the inception of a case, even before discovery is conducted. A special motion to strike, typically filed within 60 days of service of the complaint, is directed at any cause of action "arising from any act of that person in furtherance of the person's right to petition or free speech ... in connection with a public issue." CCP §425.16(b)(1). The trial court's ruling on this special motion to strike is automatically appealable by the losing party, regardless of the outcome of the motion.
Perhaps that explains why civil defendants have become "SLAPP happy" and why the appellate courts are prolific in issuing opinions that continue to define the parameters of the anti-SLAPP statute.
Defendants' Burden of Proof
The anti-SLAPP statute "requires the trial court to undertake a two-step process in determining whether to grant a SLAPP motion." Kashian v Harriman (2002) 98 CA4th 892. The first step is to decide "whether the defendant has made a threshold prima facie showing that the defendant's acts, of which plaintiff complains, were ones taken in furtherance of the defendant's constitutional rights of petition or free speech in connection with a public issue." 98 CA4th at 906. Simply stated, the trial court must determine whether the challenged cause of action arises from protected activity to which the anti-SLAPP statute applies.
The California Supreme Court has recently provided guidance as to the defendant's burden of proof by reviewing a trio of cases "in order to maximize the clarity and guidance respecting application of the anti-SLAPP statute." Navellier v Sletten (2002) 29 C4th 82, 85 n 2; see also Equilon Enterprises v Consumer Cause, Inc. (2002) 29 C4th 53; City of Cotati v Cashman (2002) 29 C4th 69.
In Equilon and City of Cotati the court held that, as part of the defendant's burden in an anti-SLAPP motion, the defendant need not "demonstrate that the action was brought with the intent to chill the defendant's exercise of constitutional speech or petition rights." Equilon, 29 C4th at 57. "A defendant who meets its burden under the statute, of demonstrating that a targeted cause of action is one 'arising from' protected activity faces no additional requirement of proving the plaintiff's subjective intent." Nor does the moving defendant need to demonstrate that the action had an actual chilling effect on the exercise of such rights. City of Cotati, 29 C4th at 74-75.
The California Supreme Court's recent cases provided guidance about the types of causes of action to which the anti-SLAPP statute may apply. In City of Cotati, the court held that the anti-SLAPP statute did not apply to a state court action filed by a city for declaratory relief regarding the constitutionality of a city ordinance on mobile-home park rent stabilization. The ordinance was filed after the park owners filed a declaratory relief action in federal court on the same issues. Since the city's action arose from the underlying controversy respecting the validity of the city's ordinance rather than from the owner's federal lawsuit, the city's action was not subject to the anti-SLAPP statute.
However, in Navellier, the court held that the statute did apply to a second lawsuit for (1) fraud based on alleged misrepresentations and omissions in connection with a release that was the subject of a first lawsuit and (2) breach of contract arising from counterclaims asserted in the first suit. The fraud claim was based on the release that had been relied on in a motion to dismiss and, thus, involved "statements or writings made in connection with an issue under consideration or review by a ... judicial body." The breach of contract claim was based on counterclaims filed in a federal action that were "in furtherance of [his] right of petition or free speech." Accordingly, the action fell squarely within the ambit of the anti-SLAPP statute. 29 C4th at 90.
In Equilon the court upheld the granting of an anti-SLAPP motion in a lawsuit for declaratory relief and injunction that was filed in response to a notice of intent to sue for alleged underground pollution violations. The court held that the suit was one "arising from" activity in furtherance of constitutional rights of speech or petition (i.e., filing the intent-to-sue notices).
Recent court of appeal cases have also evaluated whether the statute applies to other specific causes of action not previously addressed by the courts. And in August 2003, the California Supreme Court issued some guidance in Jarrow Formulas, Inc. v La Marche, (2003) 31 C4th 728, holding that the anti-SLAPP statute applies to malicious prosecution lawsuits.
The SLAPP statute has been held to affect malicious prosecution cases in another context. In Wilson v Parker, Covert & Chidester (2002) 28 C4th 811, the California Supreme Court held that the denial of an anti-SLAPP motion to strike in an underlying action, based on the plaintiff meeting its burden of proof, established probable cause and precluded a subsequent malicious prosecution case.
One court of appeal held that the SLAPP statute did not apply to a cause of action for declaratory relief on insurance coverage, because the action arose from the tender of defense and the terms of an insurance policy, not from the litigation process itself. State Farm Gen. Ins. Co. v Majorino (2002) 99 CA4th 974. Another court held that the anti-SLAPP statute does not apply to a cause of action arising out of the contract bidding process. Kajima Eng. & Constr., Inc. v City of Los Angeles (2002) 95 CA4th 921.
Plaintiffs' Burden of Proof
If the court finds that the defendant has not made the requisite showing that the defendant's acts were in furtherance of the defendant's constitutional rights of petition or free speech, the special motion to strike is denied. However, if the court finds the defendant has made the requisite showing, the burden then shifts to the plaintiff to establish a probability of prevailing on the claim by making a prima facie showing of facts that would, if proved, support a judgment in the plaintiff's favor. Kashian, 98 CA4th at 905. The plaintiff must do this on the basis of any discovery that has already been completed, because the filing of the special motion to strike stays discovery unless the court, in its discretion, grants limited discovery. CCP §425.16(g).
In making this analysis, the court considers the defendant's opposing evidence "but only to determine if it defeats the plaintiff's showing as a matter of law." Significantly, "the court does not weigh the evidence or make credibility determinations." Kashian, 98 CA4th at 905.
In Kashian, a businessman sued an attorney for defamation and unfair business practices arising out of, among other things, the filing of public interest lawsuits and a letter to the attorney general's office requesting an investigation into a possible conflict of interest the businessman had as chairman of the board of trustees of a nonprofit, tax-exempt corporation. The trial court granted the defendant attorney's special motion to strike, and the court of appeal affirmed, relying on the application of (1) the litigation privilege, (2) the statute of limitations, and (3) the qualified "common interest" privilege. Thus, although the court reviewed the evidence, it did so in the context of issues of law (the application of which would preclude evidence) or entire causes of action.
Mattel, 99 CA4th 1179, is another case in which the court engaged in a similar step-two analysis, but it held that the plaintiff did meet its burden. The court was asked to determine whether a settlement of the underlying action after a ruling adverse to the prior plaintiff impaired the "prior favorable termination," precluding this malicious prosecution case. The court of appeal affirmed the denial of the special motion, holding that the subsequent settlement did not alter the fact that a judgment on the merits on one claim had been entered in the underlying action, and affirmed on appeal, to the effect that a meritless claim had been prosecuted. Thus, consistent with Kashian, the Mattel court also analyzed and relied on a question of law rather than weighing evidence or evaluating credibility.
In cases that allege multiple causes of action, the question arises whether a SLAPP motion can be granted for fewer than all causes of action. The case of ComputerXpress, Inc. v Jackson, (2001) 93 CA4th 993, resolved this question in favor of permitting the granting of the motion for some, but not all, causes of action. In so ruling, the court held that "the fact the SLAPP motion was properly denied as to some of [plaintiff's] causes of action does not preclude granting the motion as to the remaining causes of action." 93 CA4th at 1004.
In ComputerXpress, the court of appeal affirmed the denial of the SLAPP motion to strike cause of actions for fraud, negligent misrepresentation, negligence, and interference with contracts, because there was no indication that the alleged conduct "occurred in connection with an official proceeding, concerned a public issue or issue of public interest, or took place in a public forum." The court rejected the argument that these causes of action were part of a conspiracy covering all the causes of action.
The court reversed the denial of the SLAPP motion for causes of action for trade libel, interference with prospective economic advantage, abuse of process, conspiracy, and injunctive relief arising from the filing of an SEC complaint and Internet postings, on the ground that electronic communication media may constitute public forums and the statements on the websites were made "in connection with an issue of public interest." Moreover, the posting of the SEC complaint on the Internet was a statement in a public forum in connection with an issue of public interest. And, as to both the Internet postings and the SEC complaint, the plaintiff failed to establish a probability that it would prevail. 93 CA4th at 1007-1015.
Attorneys fees are mandatory for a prevailing anti-SLAPP defendant. CCP §425.16(c). The ComputerXpress court concluded that its defendants should be considered prevailing parties and, therefore, should recover attorneys fees and costs, notwithstanding the partial loss of their SLAPP motion. The court suggested, however, that an allocation might be appropriate, and the defendants could be required to provide a proper basis for determining how much time was spent on particular claims. 93 CA4th at 1020.
More recently, the court of appeal addressed the question of whether defendants who file a SLAPP motion but prevail on a demurrer that seemingly moots the SLAPP motion are still entitled to attorneys fees. It held that such defendants are entitled to a ruling on the merits of their SLAPP motion, "the result of which will necessarily determine their right to attorney fees." Pfeiffer Venice Properties v Bernard (2002) 101 CA 4th 211, 218-219.
The statute is silent about when or how the attorneys fees request must be made, which has prompted moving parties routinely to include the request with the special motion to strike. This practice lends itself to a lack of precision, in that the moving party must estimate how much time will be spent in filing a reply and attending the hearing. In American Humane Ass'n v Los Angeles Times Comms. (2001) 92 CA4th 1095, this issue was resolved when the appellate court stated: "There are three ways the special motion to strike attorney fee issue can be raised. The successful defendant can: make a subsequent noticed motion as was envisioned by defendant in this case; seek an attorney fee and cost award at the same time as the special motion to strike is litigated as is often done; or as part of a cost memorandum." 92 CA4th at 1103. Thus, the successful defendant has the option of using a separate, noticed, attorneys fees motion. The trial court cannot deny an attorneys fees request just because the special motion does not include documents to support the award of attorneys fees.
Timing of the Motion
Anti-SLAPP special motions to strike "may be filed within 60 days of the service of the complaint or, in the court's discretion, at any later time upon terms it deems proper." CCP §425.16(f) (emphasis added). In Lam v Ngo (2001) 91 CA4th 832, the 60-day time period was held to run from the filing of an amended complaint that introduced a new cause of action to which the anti-SLAPP statute applied. The moving party also got an extra five days to file the motion if the amended complaint was served by mail. 91 CA4th at 841-842.
The Lam ruling is peculiar because the court had discretion to entertain the anti-SLAPP motion regardless of the 60-day limit-it did not need to establish that the 60-day period applies to amended pleadings. (What if the original complaint did include anti-free-speech claims and no anti-SLAPP motion had been filed?) The Lam opinion also does not discuss section 425.16(h), which provides that "for purposes of this section, 'complaint' includes 'cross-complaint' and 'petition' " but does not mention "amended complaint" or "amended cross-complaint." Lam does say that to the degree there is an ambiguity in the statute, it should be resolved in favor of a hearing on the merits. Perhaps the best resolution is to avoid a blanket rule and rely on the court's discretion (CCP §425.16(f)).
Faced with an adverse tentative ruling, and the likelihood of losing an anti-SLAPP motion, the opposing party may like an opportunity to file an amended pleading. In Simmons v Allstate Ins. Co. (2001) 92 CA4th 1068, the court rejected such a request, recognizing that a SLAPP motion is not like a demurrer or motion to strike but is more like a summary judgment motion that "pierces the pleadings and requires an evidentiary showing." Permitting leave to amend "would totally frustrate the Legislature's objective of providing a quick and inexpensive method of unmasking and dismissing such suits." 92 CA4th at 400-401.
An order granting or denying a special motion to strike is automatically appealable. CCP §425.16(j). Such an appeal should stay the action pending the outcome of the appeal. However, in Mattel, 99 CA4th 1179, after the trial court denied a special motion to strike and the defendant appealed, the trial court set a trial date. The court of appeal approved the trial court's rulings that the anti-SLAPP statute applied to malicious prosecution cases and that the respondent demonstrated a probability of prevailing on the action. However, because perfection of an appeal from the denial of the motion to strike automatically stayed the proceeding in the trial court pending the outcome of the appeal, the trial court had been divested of jurisdiction and, thus, the trial court had acted in excess of its jurisdiction by setting a trial date.
Michael C. Denison is a partner in the Los Angeles law firm Towle, Denison, Smith & Tavera. He practices civil litigation with an emphasis on defending legal malpractice and malicious prosecution cases.
Article updated: January 2004