For over a decade now,the various districts and divisions of California Courts of Appeal have articulated conflicting approaches as to how to treat anti-SLAPP motions where the plaintiff is able to prove up a part of its claim or where part of its claim arises from unprotected activity - i.e. the proverbial "mixed cause of action" prong two case. One approach holds that that where the plaintiff can prove up any part of its claim the entire cause of action stands but if plaintiff cannot substantiate any part of the claim, the entire claim gets stricken, even if it is based in part on unprotected activity. On prong one, the law is well settled. Where the cause of action arises at least in part from protected activity, prong one is satisfied, and the burden shifts to plaintiff to show a probability of prevailing on the merits of the claim on prong two. Wallace v. McCubbin (2011) 196 Cal.App.4th 1169. The second approach holds that a mixed cause of action on prong two will be split into two causes of action - one cause of action based on unprotected activity, or one that plaintiff can substantiate with admissible evidence, will be allowed to remain unscathed by the anti-SLAPP motion. While only that part of the claim that is based on protected activity and which plaintiff cannot substantiate will be segregated into a separate cause of action and stricken under the anti-SLAPP statute, CCP section 425.16. A substantial number of cases have weighed in on this raging conflict among various California Courts of Appeal. Finally, on May 13, 2015, our High Court has granted review in one such case to resolve this conflict, Baral v. Schnitt (2015) 233 Cal.App.4th 1423, superseded by grant of review in Case No. S225090, 5/13/15.
Under Mann I, the court held that if the plaintiff can prove up "ANY PART OF ITS CLAIM, the plaintiff has established that its cause of action has some merit and THE ENTIRE CAUSE OF ACTION STANDS. The court need not engage in the time consuming task of determining whether a plaintiff can substantiate all theories presented within a single cause of action. ... " Mann v. Quality Old Time Service (2004) 120 Cal.App.4th 90, 106. The recently published decision int Baral v. Schnitt (2/5/2015; B253620) 233 Cal.App.4th 1423 jumped head first into the ever-mounting controversy among the various courts of appeal as to whether to apply the Mann rule or the City of Colton v. Singletary/Cho v. Chang rule to mixed causes of action on prong two and sided with Mann. On May 13, 2015 our High Court finally granted the petition for review filed in Baral v. Schnitt, supra and is now poised to resolve the conflict.
The author asserts that the latter rule set forth in the City of Colton and Cho v. Chang, infra, cases is the better approach to mixed causes of action on prong two because it honors the broad plain language of the statute by precisely targeting protected activity without being overbroad or underinclusive in the activity it targets. The Boral case sided with Mann by relying exclusively on the "cause of action" language in subdivision (b)(1) of section 425.16. But that language appears only at the beginning of the first independent clause of that subdivision, which exclusively deals with prong one. Prong two does not begin until the dependent clause "...unless... the plaintiff has established that there is a probability that the plaintiff will prevail on the `claim'". A claim can be divided into separate counts as articulated in Justice Needham's dicta in Wallace v. McCubbin (2011) 196 Cal.App.4th 1169, at 1195 et seq., which was adopted in the City of Colton v. Singletary (2012) 206 Cal.App.4th 751 majority opinion and later by Cho v. Chang (2013) 219 Cal.App.4th 521, which held that in mixed causes of action on prong two, the court will split the cause of action into two and strike the protected activity unless can plaintiff can prove it up and allow any allegations of unprotected activity to proceed unencumbered by the anti-SLAPP statute regardless of proof. The Legislature never intended to ensnare unprotected activity within the ambit of the anti-SLAPP statute. So why should unprotected acts be stricken just because they happen to be mixed with protected activity. The problem with the Mann rule is that it is both overbroad and underinclusive in that it allows the court to strike unprotected activity that the Legislature never intended to sweep into the clutches of the anti-SLAPP statute and it permits the court allow litigation privilege and other First Amendment activity to survive to chill another day if the plaintiff can stuff the "claim" with at least one other unprotected act it can prove up. Any suggestion by Wallace or Baral that this High Court already approved of the Mann rule, in Oasis, in a true mixed cause of action is misguided as this Court has repeatedly held that its cases do not stand for propositions not decided. Oasis West Realty v. Goldman (2011) 51 Cal.4th 811 approved of the Mann rule in a case that was not a mixed cause of action case because all of the activity upon which the claim was based met prong one. See Werdegar, J. concurring opinion. On the other hand, our High Court has time and time again expressed a preference for bright-line, easily administrable rules in the anti-SLAPP context, which is the virtue of the Mann rule - simplicity and ease of application. Briggs v. Eden Council for Hope and Opportunity (1999) 19 Cal.4th 1106, 1119-1123. While these conflicts present an incredibly complex debate with courts and attorneys on different sides of this issue, the California Supreme Court has now finally agreed to resolve the hottest controversy that has been percolating for over a decade in California anti-SLAPP jurisprudence.
James J. Moneer, Esq.
Friday, May 15, 2015
Monday, March 9, 2015
Minnesota anti-SLAPP statute amended to include reports to police and other government agencies
According to a Twin Cities news outlet, a man named Keith Mueller is pushing to change a state law to protect someone from being sued for calling the cops. The Minnesota anti-SLAPP statute's current language protecting public participation is too vague and needs to include reporting apparent unlawful conduct to police, he contends. The judiciary has struggled to determine if calling police constitutes public participation under Minnesota law. Here, in California of course, police reports and any attempts to report suspected wrongdoing to any government agency are considered acts in furtherance of public participation under CCP 425.16(e)(1),(2), (4). A bill was heard in the Minnesota Legislature that would add language clarifying public participation to include calling police, speaking out about development, communicating with lawmakers, peaceful demonstrations and filing complaints with the government about safety, sexual harassment, civil rights or equal employment. The motion is to be heard March 10 in the Mueller case.
Minnesota statute 554, known as the state's anti-SLAPP statute, defines public participation as "speech or lawful conduct that is genuinely aimed in whole or in part at procuring favorable government action." This is the statute Mueller seeks to strengthen because of confusion over what constitutes public participation. This should make explicit what was implicit all along.
Minnesota statute 554, known as the state's anti-SLAPP statute, defines public participation as "speech or lawful conduct that is genuinely aimed in whole or in part at procuring favorable government action." This is the statute Mueller seeks to strengthen because of confusion over what constitutes public participation. This should make explicit what was implicit all along.
Thursday, January 8, 2015
Yelp defeats San Diego BK attorney's SLAPP motion under commercial speech exemption - Yelp v. McMillan (12/11/2014 SDSC)
In August 2013, Yelp sued McMillan for breach of contract, intentional interference with contract, unfair competition, and false advertising. Yelp believes that McMillan orchestrated fake reviews on the Yelp page for his bankruptcy law practice - an accusation McMillian denies. McMillan filed an anti-SLAPP motion in response to Yelp's suit. But McMillan's SLAPP motion appeared doomed to fail under the commercial speech exemption from SLAPP set forth in CCP 425.17(c). All of McMillan's statements that Yelp's suit alleged causes harm were statements of fact about McMillan's own services as a bankruptcy attorney designed to secure commercial transactions for his services and were published to actual or potential customers through Yelp's website. A recent ruling by Judge Joan M. Lewis confirmed this analysis denying the SLAPP motion under the commercial speech exemption of CCP 425.17(c). There will likely be an ensuing appeal but, in my opinion, it is not likely to succeed for the reasons set forth above. This appears to be a classic textbook example of a complaint alleging harm based on defendant's commercial speech activity as defined in CCP 425.17(c). Simpson-Strong-Tie v. Gore (2010) 49 Cal.4th 12.
Of more fundamental importance are the so-called extortion suits that have been filed against Yelp for burying or even deleting positive reviews unless the business buys advertising from Yelp. The Ninth Circuit has dismissed two such suits against Yelp over the past year holding that Yelp has the right to run its website as it sees fit - including the right to refuse to remove false entries, the right to bury positive reviews and bring negative ones to the top through its use of "filtered reviews" and in Levitt v. Yelp, the Ninth Circuit recently even went so far as to hold that Yelp could delete positive review/entries on its site.
What is a poor business owner to do in these cases of legalized "extortion" One Ninth Circuit Justice stated that Yelp's threat to bury or delete positive reviews is "hard bargaining" at best. But what about the unequal bargaining power between the small business and giant Yelp where the Yelp ratings are often the lifeblood of a small business. I think in some circumstances this kind of hard bargaining can rise to the level of unconscionability - both procedural and substantive. It would appear to be a contract of adhesion (procedural) and substantively so one-sided and oppressive as to shock the court's conscience in extreme cases. After all that business earned those positive reviews and that part of the Levitt holding that allows Yelp to altogether delete a positive review may sweep too far. Time will tell as this body of law develops along with the anti-SLAPP and other cyber laws.
Of more fundamental importance are the so-called extortion suits that have been filed against Yelp for burying or even deleting positive reviews unless the business buys advertising from Yelp. The Ninth Circuit has dismissed two such suits against Yelp over the past year holding that Yelp has the right to run its website as it sees fit - including the right to refuse to remove false entries, the right to bury positive reviews and bring negative ones to the top through its use of "filtered reviews" and in Levitt v. Yelp, the Ninth Circuit recently even went so far as to hold that Yelp could delete positive review/entries on its site.
What is a poor business owner to do in these cases of legalized "extortion" One Ninth Circuit Justice stated that Yelp's threat to bury or delete positive reviews is "hard bargaining" at best. But what about the unequal bargaining power between the small business and giant Yelp where the Yelp ratings are often the lifeblood of a small business. I think in some circumstances this kind of hard bargaining can rise to the level of unconscionability - both procedural and substantive. It would appear to be a contract of adhesion (procedural) and substantively so one-sided and oppressive as to shock the court's conscience in extreme cases. After all that business earned those positive reviews and that part of the Levitt holding that allows Yelp to altogether delete a positive review may sweep too far. Time will tell as this body of law develops along with the anti-SLAPP and other cyber laws.
Sunday, September 7, 2014
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
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
Saturday, August 9, 2014
Giving Legal Advice Prior To Filing Suit Is Protected By SLAPP And Barred By Litigation Privilege
In a recent unpublished case before the Second Dist. California Court of Appeal, Div. One., Kirkland v. Rappaport (B243607), the court expounded on the breadth of both the anti-SLAPP statute of CCP section 425.16 and the litigation privilege of CC 47(b) in a libel action where a lawyer or nonlawyer consultant writes a report for the client and his/her legal team to use in determining the feasibility of filing a proposed lawsuit. This case illustrates the broad protection provided to attorneys and other consultants who advise their clients as to the merits of proposed litigation.
Kirkland, a Pacific Palisades attorney, filed a libel action against attorney Rapport and the Akin Gump S.F. firm. San Francisco sole practitioner Douglas Rapport, formerly with the firm of Akin Gump, had written a report for a client, U.S. Aerospace, Inc., in which he concluded that Kirkland"likely violated his professional responsibilities as USAE's outside general counsel" and violated his fiduciary duties of loyalty, good faith, and care to the company. The report was also critical of a Charles Arnold, a former consultant to the company. Arnold was also a plaintiff in the libel action and Rapport was a defendant.
Disputing plaintiff's contention that no litigation was imminent, Justice Rothschild said, " the record shows that the USAE officers were seriously considering litigation against plaintiffs if Rapport's report confirmed their suspicion of plaintiff's wrongdoing.
Justice Rothchild observed that plaintiffs had no chance of prevailing on the merits in light of the litigation privilege; remarking:
"This is a classic case for the application of the litigation privilege because plaintiff are suing an attorney and his law firm based on confidential legal advice they supplied to a client in anticipation of litigation."
Taheri Law Group v. Evans (2006) 160 Cal.App.4th 482, 489-492 is a landmark case similarly on point. Attorney A sued Attorney B for intentional interference with contract where client sought out attorney B for a second opinion as to how to settle his pending lawsuit. Attorney B advised client to discharge Attorney A and not to pay his fees due to various breaches of the duty of care and fiduciary duties. First, the court held the act of giving legal advice to a client in the course of pending litigation goes to the heart of the client and the lawyer's petition rights. Hence, the cause of action arose from Attorney B's communications with the prospective client regarding Attorney A's actions during the pending litigation and that as a result, the claim was also barred by the litigation privilege. Moreover, the court held that as a matter of public policy, the commercial speech exemption from the anti-SLAPP statute under CCP 425.17(c) did not apply even though the plain language would indicate otherwise. - Legal advice to client during pending litigation.
The Kirkland case is one step removed from Taheri as it involved attorneys and consultants supplying advice to clients to assess the merits of filing a prospective lawsuit that was imminent and seriously contemplated. No commercial speech issue was raised in Kirkland - legal advice to client in contemplation of lawsuit.
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* EXPERT CONSULTING AND SPECIAL COUNSEL WORK
* EXPERT TESTIMONY IN SLAPP FEE MOTIONS
* EXPERT TESTIMONY IN SLAPP MALPRACTICE CASES
For more information contact James J. Moneer, Esq. at (619) 723-7030
Kirkland, a Pacific Palisades attorney, filed a libel action against attorney Rapport and the Akin Gump S.F. firm. San Francisco sole practitioner Douglas Rapport, formerly with the firm of Akin Gump, had written a report for a client, U.S. Aerospace, Inc., in which he concluded that Kirkland"likely violated his professional responsibilities as USAE's outside general counsel" and violated his fiduciary duties of loyalty, good faith, and care to the company. The report was also critical of a Charles Arnold, a former consultant to the company. Arnold was also a plaintiff in the libel action and Rapport was a defendant.
Disputing plaintiff's contention that no litigation was imminent, Justice Rothschild said, " the record shows that the USAE officers were seriously considering litigation against plaintiffs if Rapport's report confirmed their suspicion of plaintiff's wrongdoing.
Justice Rothchild observed that plaintiffs had no chance of prevailing on the merits in light of the litigation privilege; remarking:
"This is a classic case for the application of the litigation privilege because plaintiff are suing an attorney and his law firm based on confidential legal advice they supplied to a client in anticipation of litigation."
Taheri Law Group v. Evans (2006) 160 Cal.App.4th 482, 489-492 is a landmark case similarly on point. Attorney A sued Attorney B for intentional interference with contract where client sought out attorney B for a second opinion as to how to settle his pending lawsuit. Attorney B advised client to discharge Attorney A and not to pay his fees due to various breaches of the duty of care and fiduciary duties. First, the court held the act of giving legal advice to a client in the course of pending litigation goes to the heart of the client and the lawyer's petition rights. Hence, the cause of action arose from Attorney B's communications with the prospective client regarding Attorney A's actions during the pending litigation and that as a result, the claim was also barred by the litigation privilege. Moreover, the court held that as a matter of public policy, the commercial speech exemption from the anti-SLAPP statute under CCP 425.17(c) did not apply even though the plain language would indicate otherwise. - Legal advice to client during pending litigation.
The Kirkland case is one step removed from Taheri as it involved attorneys and consultants supplying advice to clients to assess the merits of filing a prospective lawsuit that was imminent and seriously contemplated. No commercial speech issue was raised in Kirkland - legal advice to client in contemplation of lawsuit.
GOT SLAPP PROBLEMS? PLAINTIFF OR DEFENDANT? WE CREATE SOLUTIONS!!
* SLAPP MOTIONS, SLAPP APPEALS, SLAPP FEE MOTIONS
* MALICIOUS PROSECUTION/ABUSE OF PROCESS
* DEFAMATION/LIBEL/SLANDER/INTERNET LIBEL/OTHER SLAPP CLAIMS
* EXPERT CONSULTING AND SPECIAL COUNSEL WORK
* EXPERT TESTIMONY IN SLAPP FEE MOTIONS
* EXPERT TESTIMONY IN SLAPP MALPRACTICE CASES
For more information contact James J. Moneer, Esq. at (619) 723-7030
Wednesday, July 23, 2014
OLD REPUBLIC CLARIFIES "GRAVAMEN" TEST AND ADOPTS BROAD CONSTRUCTION
In a case that looks remarkably similar to Navellier v. Sletten (2002) 29 Cal.App.4th 82, the recent case of Old Republic Construction Program Group v. Boccardo Law Group (6/27/14 2014) 2014 WL 2900932, the court distinguished Navellier using the elusive "Gravamen" test. The question presented is whether the statute applies to claims alleging that defendants wrongfully withdrew settlement funds derived from a now-defunct lawsuit, which they had deposited into their trust account pursuant to a stipulation requiring Old Republic's consent prior to any withdrawal of funds. The thrust of all causes of action is that defendants Boccardo and Stein breached the contract and committed fraud and breach of fiduciary duty by dispersing the settlement proceeds without Old Republic's consent. The trial court granted the SLAPP motion based on Navellier, supra. But the Court of Appeal reversed. The court held that if the cause of action arose from the stipulation, then Navellier would apply and the motion should have been granted. The court, however, reasoned that the injury-producing conduct upon which the cause of action was based consisted of nothing more than than the withdrawal of funds - a noncommunicative act. By its plain language the first 3 subdivisions of section 425.16 only apply to oral or written statements - communicative acts. Because the withdrawal of funds was not communicative, that act could not be subject to anti-SLAPP treatment unless it were connected to a public issue under subd. (e)(4). Because there was no connection to a public issue, the court held that prong one was not met and denied the SLAPP motion accordingly.
The court reviewed prior cases and obeserved that a cause of action can only be said to arise from protected conduct if it alleges at least one wrongful act - conduct allegedly breaching a duty and injuring the plaintiff - that falls within the definition of protected conduct. This is a proper broad plain language construction of the gravamen/mixed cause of action test. Cases to the contrary, are repugnant to the statute's plain language and legislative purpose. But the CA High Court will have to weigh in to definitively resolve the conflict.
The lesson I have been teaching to students and lawyers for years is that simply because you see protected activity floating around in the cause of action, does not mean that the liability arises from it. It is the injury-producing conduct that must be the focus.
The court also canvassed a plethora of authorities and held that an order partially granting a SLAPP motion and partially denying a SLAPP motion is immediately appealable under CCP 904.1(a)(13).
Old Republic is an interesting case and provides much guidance and a clearer test for determining the gravamen of a cause of action.
GOT SLAPP PROBLEMS??
PLAINTIFF OR DEFENSE?
WE CREATE SOLUTIONS ANYWHERE IN CALIFORNIA OR OUT OF STATE!!
* SLAPP MOTIONS, SLAPP FEE MOTIONS, SLAPP APPEALS
* EXPERT CONSULTATION AND SPECIAL COUNSEL WORK
* EXPERT SLAPP FEE TESTIMONY
* EXPERT SLAPP MALPRACTICE TESTIMONY
James J. Moneer, Esq.
(619) 723-7030
The court reviewed prior cases and obeserved that a cause of action can only be said to arise from protected conduct if it alleges at least one wrongful act - conduct allegedly breaching a duty and injuring the plaintiff - that falls within the definition of protected conduct. This is a proper broad plain language construction of the gravamen/mixed cause of action test. Cases to the contrary, are repugnant to the statute's plain language and legislative purpose. But the CA High Court will have to weigh in to definitively resolve the conflict.
The lesson I have been teaching to students and lawyers for years is that simply because you see protected activity floating around in the cause of action, does not mean that the liability arises from it. It is the injury-producing conduct that must be the focus.
The court also canvassed a plethora of authorities and held that an order partially granting a SLAPP motion and partially denying a SLAPP motion is immediately appealable under CCP 904.1(a)(13).
Old Republic is an interesting case and provides much guidance and a clearer test for determining the gravamen of a cause of action.
GOT SLAPP PROBLEMS??
PLAINTIFF OR DEFENSE?
WE CREATE SOLUTIONS ANYWHERE IN CALIFORNIA OR OUT OF STATE!!
* SLAPP MOTIONS, SLAPP FEE MOTIONS, SLAPP APPEALS
* EXPERT CONSULTATION AND SPECIAL COUNSEL WORK
* EXPERT SLAPP FEE TESTIMONY
* EXPERT SLAPP MALPRACTICE TESTIMONY
James J. Moneer, Esq.
(619) 723-7030
Wednesday, April 2, 2014
CONCEALMENT OF CLIENT'S BANKRUPTCY IN SETTLEMENT IS PRIVILEGED ACTIVITY AND LAWSUIT WAS DISMISSED AS A SLAPP
In a recent SLAPP case, Livingiston v. Ballantine (B250110), attorney Ballantine failed to disclose his client's bankruptcy in the course of settlement negotiations in the underlying action. As a result, Livingston was never listed as a creditor in the Bankruptcy. Livingston then sued the attorney, Ballantine for fraud for concealing his client's bankruptcy in inducing the settlement. In a case, that reasons remarkably similar to Navellier v. Sletten (2002) 29 Cal.4th 82, the court of appeal held that the act of concealing the bankruptcy was protected activity under CCP 425.16, subdivision (e)(2), the anti-SLAPP statute, and that the fraud claim was barred by the litigation privilege of CC 47(b) - similar to Navellier v. Sletten. The most curious aspect of this case is that the court of appeal held that failure to disclose the bankruptcy (a negative fraud) was a "communicative act" for purposes of the litigation privilege. The litigation privilege has been held not to cover "noncomunicative" conduct in other contexts. But the significance of this case is that a lawyer has no legal duty to disclose his client's bankruptcy in the midst of settling pending litigation and may conceal the fact of the bankruptcy to induce the settlement without penalty because it is part and parcel of his right to petition on behalf of his client.
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