Makaeff’s Anti-SLAPP Motion (Finally) Granted in Lawsuit Against Trump University – Anti-SLAPP Statute Still Applicable to State Claims in Federal Court
In 2010, Tarla Makaeff (Makaeff) filed a deceptive business practices class action lawsuit in federal court against Trump University (Trump), alleging that Trump never delivered on its promises of the scope and benefits of the program that lured her into paying nearly $60,000 in tuition (essentially arguing that Trump was an “elaborate scam”).
Trump then filed a counterclaim for defamation against Makaeff, based on statements that she had made about her experience with Trump on the Internet. Makaeff filed an anti-SLAPP motion to the counterclaim, in which she argued that Trump was a public figure and that Trump must prove she acted with actual malice in order to prevail on its defamation claim (a high burden). The district court held that the anti-SLAPP law applied to Trump’s claims, but denied the anti-SLAPP motion because it found that Trump was not a public figure and therefore did not have to show actual malice, and Trump had shown a probability of prevailing on its claim.
Makaeff appealed to the Ninth Circuit Court of Appeals, which agreed that the anti-SLAPP statute applied, but held that Trump was a limited-purpose public figure and therefore must show by clear and convincing evidence that Makaeff made her statements with actual malice. The Ninth Circuit remanded the case for factual findings as to whether or not Trump could meet this burden.
However, in two separate concurring opinions, one by Chief Justice Kozinski and one by Judge Paez, the justices suggested that the precedent that the anti-SLAPP statute can apply in federal court should be reversed.
In 1999, the Ninth Circuit held that the anti-SLAPP law can be used in federal court. In United States ex rel. Newsham v. Lockheed Missiles and Space Company (Lockheed), the Ninth Circuit held that the applicability and fee shifting provisions of the California anti-SLAPP statute do not conflict directly with Federal Rules of Civil Procedure and thus can be applicable to state law claims in federal diversity actions.
Chief Justice Kozinski and Judge Paez essentially invited Trump to file an en banc petition to revisit Lockheed. Trump did so.
In November of 2013, the Ninth Circuit denied Trump’s request for en banc rehearing. The decision affirmed that the anti-SLAPP statue applies to state claims in federal court.
The case was then remanded back to the district court to determine whether or not Trump could meet its burden of showing that Makaeff acted with actual malice.
On June 17, 2014, the district court issued its ruling. It held that Trump failed to meet its burden to show that Makaeff acted with actual malice. Because Makeaff’s statements arose from protected activity and Trump could not show a probability of prevailing on its defamation claim, the court granted Makaeff’s anti-SLAPP motion.
While the victory came more than four years after Trump filed its counterclaim, Makaeff’s case resulted in an important reaffirmation of the applicability of the anti-SLAPP law in federal court. This is important, as it prevents plaintiffs from evading the anti-SLAPP law by the tactic of filing their state causes of action in federal court.
However, this case does not close the loophole that allows plaintiffs to forum shop by filing federal claims in federal court, which are not subject to California’s anti-SLAPP law. See Globetrotter Software, Inc. v. Elan Computer Group, Inc. and Restaino v. Bah (In re Bah), which held that federal claims in federal court are not subject to California’s anti-SLAPP law. For that loophole to be closed, Congress needs to enact a federal anti-SLAPP law that would apply to federal claims in federal court across the country. For more information on the efforts to enact federal anti-SLAPP legislation, please visit www.anti-slapp.org.