Daily Journal

LITIGATION • January 6, 2003

State Courts Had 20 Opinions in 2002 Involving SLAPP Law

Focus Column

By Mark Goldowitz

            Last year, there was much judicial and legislative activity involving California's anti-SLAPP law (Code of Civil Procedure Section 425.16), which protects against Strategic Lawsuits Against Public Participation (SLAPPs) -suits that arise from a defendant's petition or speech activity. In 2002, there were 20 published opinions involving the law, including four by the California Supreme Court and an important amendment to the law passed by the Legislature but vetoed by the governor.

            The anti-SLAPP law provides a powerful means for speedy dismissal of meritless SLAPPs. This includes staying discovery while the anti-SLAPP motion is pending (Section 425.16(g)), putting the burden on the plaintiff to demonstrate that the case has merit (Section 425.16(b)(1)) and mandating recovery of attorney fees for prevailing defendants (Section 425.16(c)).

First, however, the defendant must show that the statute applies by showing that the cause of action being challenged arises from an act in furtherance of the constitutional right of petition or free speech in connection with a public issue. Section 425.16(b)(1).

            The Supreme Court in 2002 issued a series of four opinions involving the anti-SLAPP law, each one written by Justice Kathryn Werdegar. Werdegar wrote that the court issued these opinions "to maximize ... clarity and guidance respecting application of the anti-SLAPP statute." Navellier v. Sletten, 29 Cal.4th 82 (2002). The Supreme Court has issued six opinions involving the anti-SLAPP law in the 10 years that the statute has been on the books.

In Equilon Enterprises v. Consumer Cause, 29 Cal.4th 53 (2002), which drew a number of amicus briefs on both sides, the Supreme Court unanimously affirmed the dismissal under Section 425.16 of a lawsuit by an oil company seeking declaratory and injunctive relief against the defendant. The oil company challenged notices of intent to sue for violations of Proposition 65.

The court held that for the anti-SLAPP law to apply, the defendant must demonstrate only that the act or acts of which the plaintiff complains were taken in furtherance of the defendant's constitutional right of petition or free speech. However, the court held that the defendant is not required to show that the lawsuit was filed with intent to chill the defendant's constitutional rights of petition or speech, thus setting to rest an issue that had been contested hotly in numerous lower court cases for the last several years.

            In City of Cotati v. Cashman, 29 Cal.4th 69 (2002), the Supreme Court held that the anti-SLAPP law did not apply to a declaratory relief action filed by a city against a mobile-home park owner that challenged the constitutionality of the city's mobile-home rent stabilization ordinance, because the action did not arise from (was not based on) the defendant's petition or speech activity.

The court also ruled that a defendant is not required to show that the lawsuit has had, or will have, the actual effect of chilling the defendant's exercise or speech or petition rights. Instead, the defendant only must show that the lawsuit is based on the defendant's petition or speech activity.

In Navellier, the Supreme Court held (on a 4-3 vote) that a lawsuit alleging fraud and breach of contract, which was based upon the defendant filing counterclaims in federal court, allegedly in violation of a settlement release signed by the defendant, arose from the defendant's petition activity and, therefore, was covered by the anti-SLAPP law. It remanded the case for a determination of whether the plaintiffs had established a probability of prevailing on their claims.

            In Wilson v. Parker, Covert & Chidester, 28 Cal.4th 811 (2002), the Supreme Court affirmed the dismissal (by demurrer) of the plaintiffs' malicious prosecution action. The court held that when the trial court denied an anti-SLAPP motion, there was probable cause for filing the lawsuit, thus precluding a subsequent malicious prosecution action, even when that denial subsequently was reversed by an appellate court.

            In Seelig v. Infinity Broadcasting, 97 Cal.App.4th 789 (2002), the 1st District reversed the trial court's denial of an anti-SLAPP motion challenging a lawsuit in which talk-radio-show hosts referred to a contestant on the "Who Wants to Marry a Multimillionaire" television show as a "local loser" and "chicken butt" and falsely stated that the contestant's former husband had said she was a "big skank."

            In Kashian v. Harriman, 98 Cal.App.4th 892 (2002), the 5th District affirmed the dismissal under Section 425.16 of a complaint by a businessman that alleged that the defendants, an attorney and his client, engaged in unfair competition by filing sham environmental lawsuits and that they made defamatory statements in a letter to the attorney general calling for an investigation of the plaintiff's business activities, which letter also was distributed to others.

            In Mattel v. Luce, Forward, Hamilton & Scripps, 99 Cal.App.4th 1179 (2002), the 2nd District ruled that the defendants' appeal of the denial of their anti-SLAPP motion automatically stayed the proceedings in the trial court, pursuant to Code of Civil Procedure Section 916. The Court of Appeal also affirmed the trial court's denial of the defendants' anti-SLAPP motion because the plaintiff had shown a probability of prevailing on the malicious prosecution claim.

            In Pfeiffer Venice Properties v. Bernard, 101 Cal.App.4th 211 (2002), the trial court, instead of ruling on the defendants' anti-SLAPP motion, sua sponte dismissed the plaintiff landlord's lawsuit under the doctrine of de minimis non curat lex and then denied the defendants' motion for fees. The 2nd District reversed the order denying fees, holding that the defendants were entitled to a ruling on the merits of their anti-SLAPP motion, which necessarily would determine whether they were entitled to fees.

            In The Governor Gray Davis Committee v. American Taxpayers Alliance, 102 Cal.App.4th 449 (2002), the 1st District reversed the trial court's denial of the defendant's anti-SLAPP motion. The motion challenged a lawsuit against the defendant for alleged violations of the Political Reform Act in connection with the defendant's TV ads, which were critical of Gov. Davis' handling of the energy crisis in California. The appellate court held that the plaintiff's allegation that the defendant's communications were illegal did not prevent the defendant from invoking the anti-SLAPP law.

            In Gallimore v. State Farm, 102 Cal.App.4th 1388 (2002), the 2nd District reversed the trial court's granting of an anti-SLAPP motion against a complaint that alleged claims-handling misconduct by the defendant insurance company. The court held that the anti-SLAPP law did not apply because the defendant's alleged misconduct was not an exercise of its petition or speech rights and that the fact that the plaintiff sought to prove the defendant's misconduct by use of documents filed by the defendant with the Department of Insurance did not allow the defendant to invoke the anti-SLAPP law.

            In White v. Lieberman, 103 Cal.App.4th 210 (2002), the trial court sustained without leave to amend the demurrer of the defendant attorney against a malicious prosecution claim and ruled that the defendant's anti-SLAPP motion was therefore moot. On appeal, the 2nd District reversed the mootness ruling, holding that the order declaring the motion to be moot was the equivalent of a denial and therefore appealable, that the anti-SLAPP statute applied to malicious prosecution claims and that the plaintiff had not shown a probability of prevailing on his claims. The court remanded for a determination of the amount of fees that should be awarded to the defendant.

            In Yu v. Signet Bank/Virginia, 103 Cal.App.4th 298 (2002), the 1st District held that a lawsuit challenging a bank's collection practices was covered by the anti-SLAPP law because it arose from the bank's petition activity (filing collection lawsuits) but that the plaintiffs had shown that their lawsuit had sufficient potential merit to withstand the bank's anti-SLAPP motion.

            In response to increasing concerns that the anti-SLAPP law is being abused by corporations to frustrate and obstruct legitimate lawsuits based upon corporate misconduct (including cases such as Gallimore and Yu), last year the Legislature passed SB789, by Sen. Sheila Kuehl, which would exempt certain consumer protection and public interest lawsuits from the anti-SLAPP law.

            However, business interests strongly opposed the bill and Gov. Davis vetoed it. It is expected that the bill will be re-introduced this year.

Mark Goldowitz is a sole practitioner in Berkeley who specializes in defenses against SLAPPs. He is also the director of the California Anti-SLAPP Project, which was a co-sponsor of SB789 and filed an amicus brief in support of the defendant in Equilon.