Daily Journal

LITIGATION • January 19, 2005

Amendment, Rulings Work to End Abuse of Anti-SLAPP Law

Focus Column

By Mark Goldowitz

Last year, a significant amendment to the state anti-SLAPP law took effect, and the courts issued a flurry of published opinions - at least 32 of them - involving the statute. This law, Code of Civil Procedure Section 425.16, 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.

Most significantly, on Jan. 1, 2004, a new amendment to prevent corporate abuse of the anti-SLAPP law took effect. This amendment exempted certain public-interest litigation and false-advertising claims, with the exemptions detailed in new Code of Civil Procedure Section 425.17, subdivisions (b) and (c).

The courts quickly applied the new law to pending litigation, affirming that false-advertising, fraud or product-liability claims against Tyson Foods, U-Haul and Metabolife (which sells dietary supplements) were all exempt from the anti-SLAPP law under Section 425.17(c). Physicians Committee for Responsible Medicine v. Tyson Foods, 119 Cal.App.4th 120 (2004); Metcalf v. U-Haul International, 118 Cal.App.4th 1261 (2004); Brenton v. Metabolife International, 116 Cal.App.4th 679 (2004); Scott v. Metabolife International, 115 Cal.App.4th 404 (2004).

A panel held that the public-interest-litigation exemption in Section 425.17(b) applies to an unfair-business-practices action against building contractors and subcontractors for failing to pay the prevailing wage under the city's redevelopment policy. Northern California Carpenters Regional Council v. Warmington Hercules Associates, 124 Cal.App.4th 296 (2004).

Another court held that an unfair-business-practices suit against a satellite television company, challenging thousands of demand letters that the company had sent out, was not exempt from the anti-SLAPP law under Section 425.17(b) because the court found that it would not enforce an important right affecting the public interest. Blanchard v. Directv, 123 Cal.App.4th 903 (2004).

The state Supreme Court last year issued two opinions arising from the anti-SLAPP law, and six more are pending.

In Zamos v. Stroud, 32 Cal.4th 958 (2004), attorney Jerome Zamos sued attorney James Stroud for malicious prosecution, based on a fraud action against Zamos in which Stroud represented the plaintiff. The Supreme Court held that an attorney may be held liable for continuing to prosecute an action after learning that it is not supported by probable cause.

In Gates v. Discovery Communications, 34 Cal.4th 679 (2004), Steve Gates brought a defamation and invasion of privacy action against Discovery Communications, after Discovery produced and aired a television show about a 13-year-old murder case in which Gates was implicated. The Supreme Court held that Discovery was not liable for publication of facts obtained from public official records, overruling the court's previous opinion in Briscoe v. Reader's Digest Association, 4 Cal.3d 529 (1971). The Supreme Court also has granted review in six 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); Varian Medical Systems v. Delfino, S121400 (whether the appeal from the denial of a special motion to strike effects an automatic stay of the trial court proceedings); Barrett v. Rosenthal, S122953 (whether the federal Communications Decency Act (47 USC 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); and 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).

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

In Sylmar Air Conditioning v. Pueblo Contracting Services, 122 Cal.App.4th 1049 (2004), before Pueblo's anti-SLAPP motion challenging Sylmar's cause of action for fraud could be heard, Sylmar filed a first amended cross-complaint and argued that Pueblo's motion was moot. The trial court granted the anti-SLAPP motion and awarded fees.

The 2nd District Court of Appeal affirmed, holding that Sylmar could not evade Pueblo's anti-SLAPP motion by filing an amended pleading, even if it could do so as a matter of right under Section 472 of the Code of Civil Procedure.

In Wilbanks v. Wolk, 121 Cal.App.4th 883 (2004), brokers sued a consumer watchdog for defamation and unfair business practices, arising from statements published on defendant's Web site. The 1st District Court of Appeal held that the anti-SLAPP law applied, because the defendant's statements were made in a public forum (the Internet) about an issue of public interest (consumer protection information, including warnings not to use the plaintiffs' services).

However, the 1st District held that a reasonable trier of fact could conclude that the published statements imply a provably false factual assertion, and the panel reversed the trial court's grant of the defendant's anti-SLAPP motion.

In Gallagher v. Connell, 123 Cal.App.4th 1260 (2004), a trustee sued a former beneficiary of the trust for slander and libel, for publicly criticizing him for putting his own interests ahead of those of the creator of the trust. The 2nd District Court of Appeal held that, because the defendant did not object properly to evidence in the trial court, such evidence could be considered in determining whether the plaintiff had met his burden to make a prima facie showing that his claim had merit.

In Morin v. Rosenthal, 122 Cal.App.4th 673 (2004), the plaintiff sued on multiple theories. Appellate justices, once again in the 2nd District, affirmed the trial court's denial of the defendants' anti-SLAPP motion because it was untimely, but the panel reversed a sanctions order against the defendants because it failed to recite in detail the conduct or circumstances justifying the order.

In Benasra v. Mitchell Silberberg & Knupp LLP, 123 Cal.App.4th 1179 (2004), the plaintiff sued a law firm that had represented its opponent in an arbitration, for legal malpractice and attorney breach of duty of loyalty. This time, the 2nd District held that the anti-SLAPP statute did not apply because the plaintiff's claims arose not from filing a petition on behalf of one client against another but from the defendants' alleged failure to maintain loyalty to and confidences of a client.

In San Ramon Valley Fire Protection District v. Contra Costa County Employees' Association, 2004 DJDAR 15285 (2004), the plaintiff sought judicial review of the defendant public entity's vote to modify employer payments due under the county retirement system. The 1st District Court of Appeal held that the lawsuit was not subject to the anti-SLAPP law because it arose from an action taken by the public entity, not from the public entity's exercise of its petition or speech rights.

In Fair Political Practices Commission v. American Civil Rights Coalition, 121 Cal.App.4th 1171 (2004), the commission filed suit against Ward Connerly and his organization. The 3rd District Court of Appeal held that defendants' anti-SLAPP motion was not heard within 30 days after service of the motion and that the defendants had not shown that the docket conditions of the court required a later hearing, so the trial court had no jurisdiction to hear the anti-SLAPP motion.

In Annette F. v. Sharon S., 119 Cal.App.4th 1146 (2004), the plaintiff sued her former domestic partner for libel, based on a letter published in the Gay and Lesbian Times that said that the plaintiff was convicted of domestic violence and had made repeated false accusations of child abuse and neglect. The 4th District Court of Appeal held that the statements in the letter were covered by the anti-SLAPP law, because they were made in connection with an issue under consideration by a judicial body: adoption litigation involving the two parties.

The court also held that the plaintiff had failed to establish that her claim had merit, because she was a limited-purpose public figure but had not shown that the defendant's statement was made with "actual malice," and the panel reversed the trial court's denial of the defendant's anti-SLAPP motion.

In Verizon Delaware Inc. v. Covad Communications Co., 377 F.3d 1081 (2004), the 9th U.S. Circuit Court of Appeals held that, for cases in federal court, granting a defendant's anti-SLAPP motion to strike a plaintiff's initial complaint without granting the plaintiff leave to amend would collide directly with the policy favoring liberal amendment in Rule 15(a) of the Federal Rules of Civil Procedure.

Mark Goldowitz, an attorney in Berkeley and director of the California Anti-SLAPP Project, specializes in defending against SLAPPs. Goldowitz 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. CASP filed an amicus brief in support of defendants in Varian Medical Systems v. Delfino. Goldowitz submitted an amicus letter and a declaration in support of the plaintiffs in Blanchard v. Directv.

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