Daily Journal

LITIGATION • January 6, 2006

Act Removes Major Obstacles To Filing of SLAPPback Suits

Focus Column

By Mark Goldowitz

            Last year, new amendments to the California anti-SLAPP law were enacted and took effect. The courts issued 31 published opinions involving this law, Code of Civil Procedure Section 425.16, which protects against Strategic Lawsuits Against Public Participation: lawsuits that arise from a defendant's petition or speech activity, by providing for speedy dismissal of such suits.

            On Oct. 5, Gov. Arnold Schwarzenegger signed AB 1158, which amended the anti-SLAPP law and also enacted a new section, 415.18, of the Code of Civil Procedure. The bill passed the Legislature overwhelmingly (with only one "no" vote), and, because it was urgency legislation, it took effect when the governor signed it.

            Most significantly, the bill removes major obstacles to the filing of "SLAPPback" lawsuits: suits filed by SLAPP victims alleging malicious prosecution or abuse of process and seeking damages suffered as a result of the SLAPPs filed against them. The new law provides that defendants in SLAPPback cases cannot invoke the prevailing defendant attorney fee or the immediate appeal provisions of the anti-SLAPP law. Section 425.18(c).

            The bill also amends the anti-SLAPP law to provide that when a SLAPP victim gets a SLAPP dismissed under the anti-SLAPP law, he or she can file a SLAPPback against the filers of the SLAPP, even if the trial court (erroneously) denied the anti-SLAPP motion. Section 425.16(b)(3).

            The legislative history makes clear that this amendment overrules an opinion by the California Supreme Court, Wilson v. Parker, Covert & Chidester, 28 Cal.4th 811 (2002), which held that the trial court's denial of an anti-SLAPP motion meant that, as a matter of law, there was probable cause to file the SLAPP, thereby preventing the SLAPP victim from filing a SLAPPback.

            Finally, the bill also amends the anti-SLAPP law to provide that a defendant is not prevented from proceeding with an anti-SLAPP motion when the hearing on that motion is scheduled for more than 30 days after service of that motion. Section 425.16(f). Uncodified legislative-intent language makes clear that this overrules two opinions holding that a defendant may not proceed with an anti-SLAPP motion in such circumstances unless the defendant has demonstrated that the docket conditions of the court required a later hearing. Statutes 2005, c. 535, Section 3, stating that the intent of the amendment of subdivision (f) is to overrule Decker v. U. D. Registry, 105 Cal.App.4th 1382 (2003); Fair Political Practices Commission v. American Civil Rights Coalition, 121 Cal.App.4th 1171 (2004).

            The California Supreme Court last year issued one opinion arising from the anti-SLAPP law, and nine more cases are pending.

            In Varian Medical Systems v. Delfino, 35 Cal.4th 180 (2005), the plaintiff corporations and corporate officials sued two former employees, based on derogatory postings on the Internet. The defendants filed anti-SLAPP motions, which were denied by the trial court. The defendants appealed, pursuant to what is now Section 425.16(I), which allows defendants to file an immediate appeal of the denial of an anti-SLAPP motion.

            The defendants then argued that the trial-court proceedings were stayed by the appeal. However, the trial court rejected this argument, and the case proceeded to a jury trial. The jury found the defendants liable for $775,000 in damages, and the trial court issued a permanent injunction against the defendants. The Court of Appeal affirmed the damages award and modified the injunction.

            The California Supreme Court granted review. Six justices voted to reverse, with Chief Justice Ron George dissenting. The court majority held that, pursuant to Section 916(a) of the Code of Civil Procedure, the defendants' appeal of their rejected anti-SLAPP motions automatically stayed all further trial-court proceedings on the merits upon the causes of action affected by the motions. Therefore, the trial court has no jurisdiction to proceed with the trial, and the judgment was reversed.

             The Supreme Court also has granted review in 10 other cases involving the anti-SLAPP law and the following issues: Kids Against Pollution v. California Dental Association, S117156 (whether causes of action that contain allegations of both protected and unprotected conduct are subject to the anti-SLAPP law); Barrett v. Rosenthal, S122953 (whether the federal Communications Decency Act (47 U.S.C. Section 230) confers absolute immunity on an Internet "provider" or "user" that republishes statements made by third parties); Soukup v. Hafif, S126715, and Soukup v. Stock, S126715 (whether a cause of action for malicious prosecution is subject to an anti-SLAPP motion if the underlying action was itself dismissed under an anti-SLAPP motion); S.B. Beach Properties v. Berti, S127513 (whether a trial court can award attorney fees under the anti-SLAPP law if the action was voluntarily dismissed before the anti-SLAPP motion was filed); Flatley v. Mauro, S128429 (whether a cause of action based upon illegal conduct (for example, extortion) allegedly engaged in by the defendant is subject to an anti-SLAPP motion); Kibler v. Northern Inyo County Local Hospital District, S131641, and O'Meara v. Palomar Pomerado Health System, S131874 (whether an action arising out of hospital peer review proceedings is subject to an anti-SLAPP motion); Taus v. Loftus, S133805 (whether a party's repeated consent to publication of intimate details of her alleged childhood sexual abuse made her a limited-purpose public figure for purposes of her invasion-of-privacy suit); and Harron v. Bonilla, S131552 (briefing deferred pending disposition of related issue in Flatley v. Mauro).

            The intermediate appellate courts last year dealt with a range of other issues involving the anti-SLAPP law.

            In Thomas v. Quintero, 126 Cal.App.4th 635 (2005), a landlord with many rental units filed a petition for civil harassment, pursuant to Code of Civil Procedure Section 527.6, seeking to enjoin defendant and others from demonstrating and leafleting against the landlord's eviction, maintenance and other practices. The trial court denied the defendant's anti-SLAPP motion on the ground that the anti-SLAPP law did not apply to petitions for injunction against civil harassment.

            The Court of Appeal reversed and ordered the lawsuit dismissed, holding that civil harassment petitions are potentially subject to the anti-SLAPP law, that the defendant's activities constituted speech in connection with an issue of public interest and therefore the anti-SLAPP law applied, and that the plaintiff had failed to show that his lawsuit had any merit.

            In Foundation for Taxpayer and Consumer Rights v. Garamendi, 132 Cal.App.4th 1375 (2005), the plaintiff consumer groups sued to invalidate legislation amending Proposition 103, regarding insurance rates. Mercury Insurance intervened, filing an anti-SLAPP motion.

            The trial court denied the motion and ordered Mercury to pay $70,429.04 in fees and costs to the plaintiffs, pursuant to Section 425.16(c), on the ground that Mercury's motion was frivolous. The Court of Appeal affirmed, holding that the lawsuit was exempt from the anti-SLAPP law as public-interest litigation, pursuant to Section 425.17(b), and that as an intervenor, Mercury was not a defendant and therefore was not entitled to bring an anti-SLAPP motion.

            In Peregrine Funding v. Sheppard Mullin Richter & Hampton, 133 Cal.App.4th (2005), investors who lost millions of dollars in a large Ponzi scheme and a bankruptcy trustee representing entities that were used to perpetrate the scheme sued the defendant law firm, claiming its negligence and misconduct helped the perpetrators of the scheme to avoid detection and prosecution. The defendant filed an anti-SLAPP motion, which the trial court denied.

            The Court of Appeal reversed in part. It noted that the plaintiffs' claims were "mixed" - that is, they were based on both activity that was not protected by the anti-SLAPP law (such as failing to disclose potential conflicts of interest, obtain informed consent from all clients to its joint representation, and turn over all client documents upon request after withdrawing from representation) and litigation tactics that were protected by the anti-SLAPP law (such as opposing the SEC's efforts to obtain restraining orders and to appoint a receiver, stopping a deposition and responding selectively to discovery by withholding key documents).

            The court held that the plaintiffs' claims were subject to the anti-SLAPP law because they were based in significant part on the defendant's protected petitioning activity, and therefore they were not "merely incidental" to the unprotected conduct. The court further found that certain of the plaintiffs' claims were barred by the doctrine of unclean hands or the statute of limitations, and the court held that defendant's anti-SLAPP motion should have been granted as to those claims.

            In Lee v. Fick, 2005 DJDAR 14829, a high-school coach sued parents of his players for libel, slander and related claims. The claims were based on statements in a letter to the school board and comments to school officials and to parents of some players that the coach was manipulative, verbally, emotionally and physically abusive to the kids, unethical and mentally and emotionally unstable.

            The Court of Appeal held that the defendants' anti-SLAPP motion should have been granted as to the entire complaint, because the statements were made in connection with an official proceeding (the parents' ultimately successful effort to get the coach fired) and therefore were protected under the anti-SLAPP law and absolutely privileged under Civil Code Section 47 (b).

Mark Goldowitz, an attorney in Berkeley and director of the California Anti-SLAPP Project, specializes in defending against SLAPPs. Goldowitz represented defendant John Quintero in Thomas v. Quintero, is co-counsel for defendant Ilena Rosenthal in Barrett v. Rosenthal and was co-counsel for the defendants in S.B. Beach Properties v. Berti in the trial court. California Anti-SLAPP Project filed an amicus brief (with the ACLU) in support of the defendants in Varian Medical Systems v. Delfino.