COMPLAINT DISMISSED IN FACE OF PENDING SLAPP MOTION - CONFLICT

WHAT HAPPENS WHEN PLAINTIFF DISMISSES COMPLAINT IN RESPONSE TO A PENDING ANTI-SLAPP MOTION? CONFLICTS ABOUND!

    What happens when a plaintiff dismisses the complaint in lieu of opposition to a pending SLAPP motion pursuant to CCP section 425.16?  Very recently, I have experienced wide variation in what different trial judges will do when confronted with this situation.  I filed two SLAPP motions, in two different cases, before two different trial judges in the same courthouse.  Both cases involved defamation, internet libel, and malicious prosecution claims.  In both cases, each plaintiff dismissed the complaint in lieu of opposition within weeks of each other.   Judge A heard the SLAPP motion on its merits and granted it in order determine prevailing party status for purposes of a subsequent motion for an award of mandatory attorney's fees pursuant to the anti-SLAPP statute's fee provision relying principally on Liu v. Moore (1999) 69 Cal.App.4th 745, 750-752 and Pfeiffer Venice Properties v. Bernard (2002) 101 Cal.App.4th 211, 217-219. [CCP § 425.16, subd. (c)].  See also the most recent case on point, Tourgeman v. Nelson & Kennard (2014) 222 Cal.App.4th 1447, 1456-1457 [adopting the holdings and reasoning of Liu and Pfeiffer].  A few weeks later, a different judge down the hall, Judge B, ruled that the court had no jurisdiction to rule on the merits of the SLAPP motion, took the motion off calendar, and ordered defendants to argue the entitlement or prevailing party issue in defendant's subsequent motion for mandatory attorney's fees relying primarily on Kyle v. Carmon (1999) 71 Cal.App.4th at p. 908, fn. 4; and The Law Office of Andrew Ellis v. Yang (2009) 178 Cal.App.4th 869, 879.  Judge B further ruled: "until defendant makes a motion for an award of attorneys fees and costs, the Court need not consider the merits." To Judge B's credit, however, His Honor ordered that the parties may not file any new briefing or evidence with respect to the merits of the SLAPP motion and that the preliminary question of who is the prevailing party shall be based solely upon the party's moving papers submitted in support of the initial anti-SLAPP motion as requested by defense counsel.  

    Even more perplexing is the palpable conflict of authority among a number of Second District cases.  The approach taken in Liu v. Moore/Pfeiffer Venice Properties, supra, I believe, best comports with the plain language and policies undergirding the anti-SLAPP statute.  Both cases hold, with the latter relying on the former, that the court is "required" to hear the SLAPP motion on its merits in order to determine the prevailing party on the anti-SLAPP motion before fees can be awarded.  See also Tourgeman, supra.  Moreover, it would seem to promote judicial economy for the court to resolve the merits issue while the SLAPP motion is teed up for the court rule on rather than have the parties wait and relitigate that issue as part of the fee motion - which is likely to be contentious in its own right.  It definitely puts the specially moving SLAPP defendant at a significant disadvantage to have both motions ruled on in one fee motion.  Furthermore, it is imperative to note that the Law Office of Andrew Ellis v. Yang (2009) 178 Cal.App.4th 869, 878 never even once mentioned the 1999 Liu v. Moore, supra, case, which is the landmark SLAPP case on this issue.  This becomes more of an anomaly when one considers that all three of these cases (i.e. Liu, Pfeiffer, and Yang) are Second District cases.  As shown below, Ellis and other similar cases do not comport with the plain language and policy of section 425.16. 

    As shown at length in Liu v. Moore (1999) 69 Cal.App.4th 745, inter alia, when plaintiff dismisses its action, with or without prejudice, in response to a pending section 425.16 anti-SLAPP motion, defendants have the right to a ruling on their special motion to strike as a necessary predicate to an award of attorney's fees. Id., at 751.  The weight of authority in this situation holds that where a plaintiff dismisses its action in response to a SLAPP motion, the court must rule on the merits of the SLAPP motion as a predicate to an attorney fee award and retains jurisdiction to do so. Id.; Pfeiffer Venice Properties v. Bernard (2002) 101 Cal.App.4th 211, 218-219 [accord approving of Liu, supra]; Tourgeman v. Nelson & Kennard (2014) 222 Cal.App.4th 1447, 1456-1457 [adopting the holdings and reasoning of Liu and Pfeiffer].  See also South Sutter, LLC v. L.J. Sutter Partners, L.P. (2011) 193 Cal.App.4th 634, 667 [anti-SLAPP procedure provides "a mechanism whereby a complaint's lack of merit can be determined on the merits after the complaint is dismissed].  But see Ellis, supra, 178 Cal.App.4th at 879 citing (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 908, contra, [court had no jurisdiction to rule on the merits of the SLAPP motion after complaint dismissed]. 

   "The purpose of section 425.16 is clearly to give relief, including financial relief in the form of attorney's fees and costs, to persons who have been victimized by meritless retaliatory SLAPP suits because of their participation in matters of public significance (§ 425.16,    subd. (a))" Liu., at 750.  "We hold that a defendant who is voluntarily dismissed, with or without prejudice, after filing a section 425.16 motion to strike, is nevertheless entitled to have the merits of such motion heard as a predicate to an award of attorney's fees and     costs under subdivision (c) of that section." Liu, supra; Pfeiffer Venice Properties v. Bernard (2002) 101 Cal.App.4th  211 [accord].
   
    "Therefore, the trial court's adjudication of the merits of a defendant's special motion to strike is an `essential' predicate to a ruling on the defendant's request for an award of attorney's fees and costs. An award of these expenses under section 425.16 is only justified when a defendant demonstrates that plaintiff's action falls within the provisions of subdivision (b) and the plaintiff is unable to establish a reasonable probability of success.  Until a court determines that these circumstances exist, a moving defendant is not entitled to fees and costs under section 425.16.  If such judicial  determinations were not first required, and a fair procedural  opportunity to obtain it allowed, then a plaintiff's voluntary dismissal of the action could have the effect of (1) depriving the defendant statutorily authorized fees, or (2) entitling a  defendant to such relief in a non-SLAPP action which was dismissed by plaintiff for entirely legitimate reasons.  In both situations, the purpose of the statute's remedial  provisions would be frustrated." Liu, supra,, at 752-753.

    The Liu court's cogent reasoning plainly demonstrates that the approach taken in Ellis, Coltraine, and Kyle v. Carmon is fundamentally misguided because the moving party must first be adjudicated the prevailing party on the merits of the SLAPP motion before fees can be awarded according the terms of the statute.  [Both Ellis and Kyle, supra, hold that the court lacks jurisdiction to rule on the merits of the SLAPP motion once plaintiff dismisses the complaint in response to a pending SLAPP motion and that the court must go back and decide which party would have prevailed on the SLAPP motion in connection with a subsequent fee motion].  While Coltraine, supra, holds that the court has jurisdiction to decide the prevailing party issue on the SLAPP motion, that case also holds that the court has "discretion" to either rule on the merits of the motion or simply decide who the prevailing party is without a ruling based solely on plaintiff's purported motives for dismissal.  So if the court has "discretion" to decide the prevailing party issue without ruling on the SLAPP motion, then the court could easily end up depriving a worthy SLAPP defendant of fees and costs that Legislature intended them to have or it could award a windfall of SLAPP fees to an unworthy defendant without first requiring defendant to show that at least prong one of the anti-SLAPP statute has been satisfied.  Thus, the Ellis/Kyle/Coltraine approach may result in both overbroad and underinclusive SLAPP fee awards.   At minimum, the Ellis/Kyle/Coltraine approach unnecessarily frustrates the goal judicial economy and puts the fee applicant at an unfair disadvantage by forcing the applicant to brief and the court to, in effect, rule on two motions in one.  In contrast, the Liu/Pfeiffer/Tourgeman approach best encourages participation in matters of public significance by encouraging attorneys to take on the defense of worthy SLAPP targets - without fear of plaintiff dismissing and evading SLAPP fees.  On a final note, our High Court held that a plaintiff or cross-complainant can dismiss the complaint at any time before the SLAPP motion is filed without penalty. S.B. Beach Properties v. Berti (2006) 39 Cal.4th 374.  So plaintiffs do have a ready escape hatch and a meaningful opportunity to screen and reevaluate their complaints for SLAPP issues before the defendants can get their motion on file - usually within the first 30-60 days after the complaint is served. [CCP § 425.16, subd. (f)].   

    For the foregoing reasons, I believe courts should follow the Liu/Pfeiffer/Tourgeman line of authority and resolve the merits of the anti-SLAPP motion where plaintiff dismisses the complaint in response to a pending SLAPP motion. But until the California Supreme Court weighs in on this issue, each party will have to argue cases that support their side, roll the dice, and hope the trial judge adopts the line of authority favorable to their client.  This issue is in urgent need of High Court resolution - right up there with mixed causes of action on prong two.  Based on recent denials of numerous petitions on these ripe SLAPP issues, it does not appear that our High Court will intervene anytime soon.

James J. Moneer, Esq. has been handling SLAPP motions, civil appeals, and SLAPP fee motions for plaintiffs and defendants throughout California since 1994.  He has been a regular panelist on The Rutter Group anti-SLAPP seminars since 2003 and a panelist on Pincus Professional Education's anti-SLAPP seminars since 2009.  He teaches anti-SLAPP law at the University of San Diego School of Law.  He also testifies as an anti-SLAPP attorney fee and SLAPP legal malpractice expert and has published numerous articles on the subject. Web: www.slapplaw.com. Blog: www.slapplaw.blogspot.com   

* NOTE:THIS ARTICLE WAS PREVIOUSLY PUBLISHED IN THE SEPTEMBER 5, 2014 EDITION  OF THE LA DAILY JOURNAL