California Supreme Court Affirms Expansive Reading Of Anti-SLAPP Statute

In late August 2002, the California Supreme Court issued three decisions that broadly reaffirm the reach of California's anti-SLAPP statute. The decisions strengthen the protection for expressive activities by confirming that the statute applies to any lawsuit arising from a defendant's exercise of First Amendment rights - even where the plaintiff did not subjectively intend to chill the defendant's expression, and even where the defendant's expression is alleged to be a breach of confidentiality or otherwise unlawful.

The anti-SLAPP statute, California Code of Civil Procedure § 425.16, was enacted in 1992 in response to "a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." Id. § 425.16(a). Under this statute, if a defendant can demonstrate that the lawsuit arises from an act "in furtherance of the person's rights of petition or free speech under the United States or California Constitution in connection with a public issue," the lawsuit must be dismissed unless the plaintiff can demonstrate a probability of prevailing on its claims. Id. § 425.16(b). The California Legislature defined the conduct that constitutes an "act in furtherance of the person's rights of petition or free speech" and thereby provided a "bright line test" for determining whether a particular claim is subject to the statute. Briggs v. Eden Council, 19 Cal. 4th 1106, 1120-21 (1999). Protected conduct includes:

(a) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.

Cal. Code Civ. Proc. § 425.16(e).

In 1997, in response to a series of cases that attempted to limit the reach of the anti-SLAPP statute, the Legislature amended the statute to provide that it "shall be construed broadly." Id. § 425.16(a). Nonetheless, before the Supreme Court's recent decisions, a split had developed among California's Courts of Appeal regarding whether a court evaluating a motion brought under Section 425.16 should consider the plaintiff's subjective motivations for bringing the lawsuit. Some cases held that the statute applied only if the plaintiff, in bringing its claim, intended to chill defendant's rights of free speech or petition. E.g., Foothills Townhome Ass'n v. Christiansen, 65 Cal. App. 4th 688, 76 Cal. Rptr. 2d 516 (1998). Other cases rejected these or similar requirements, finding that they were not supported by the language of the statute. One court explained:

We find nothing in the statute requiring the court to engage in an inquiry as to the plaintiff's subjective motivations before it may determine the anti-SLAPP statute is applicable.... The fact the Legislature expressed a concern in the statute's preamble with lawsuits brought "primarily" to chill First Amendment rights does not mean that a court may add this concept as a separate requirement in the operative sections of the statute.

Damon v. Ocean Hills Journalism Club, 85 Cal. App. 4th 468, 480, 102 Cal. Rptr. 2d 205 (2000) (citations omitted).

Another area of disagreement among the Courts of Appeal was whether the purported illegality or wrongfulness of the defendant's actions is relevant in determining whether the anti-SLAPP statute applies. One case had held that the statute did not apply if the defendant admitted that its actions underlying the lawsuit were illegal. Paul for Council v. Hanyecz, 85 Cal. App. 4th 1356, 102 Cal. Rptr. 2d 864 (2001). In another case, the court rejected the plaintiff's argument that the statute did not apply because the defendant's alleged disclosure of privileged and confidential documents was not constitutionally protected. Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal. App. 4th 294, 305, 106 Cal. Rptr. 2d 906 (2001). The court found that the argument "confuses the threshold question of whether the SLAPP statute applies with the question whether Fox has established a probability of success on the merits." Id.

To resolve these disputes, the California Supreme Court granted review in three cases, Equilon Enterprises, LLC v. Consumer Cause, Inc., 29 Cal. 4th 53, 124 Cal. Rptr. 2d 507 (2002); City of Cotati v. Cashman, 29 Cal. 4th 69, 124 Cal. Rptr. 2d 519 (2002); and Navellier v. Sletten, 29 Cal. 4th 82, 124 Cal. Rptr. 2d 530 (2002). The Court explained:

We granted review in this trio of cases in order to maximize the clarity and guidance respecting application of the anti-SLAPP statute the full group of decisions may provide to bench and bar.

City of Cotati, 29 Cal. 4th at 72 n.2.

Equilon was the primary decision, and laid the groundwork for the other two cases. In this case, Equilon filed a complaint for declaratory and injunctive relief in response to intent-to-sue notices filed by Consumer Cause, Inc., alleging illegal groundwater pollution. In response, Consumer Cause filed a SLAPP motion. Equilon argued that its case was not a SLAPP suit because its motives in bringing the underlying lawsuit were simply to clarify its obligations under the anti-pollution law, not to "chill" Consumer Cause's First Amendment rights. The Court unanimously rejected the argument, explaining,

[T]he only thing the defendant needs to establish to invoke the [potential] protection of the SLAPP statute is that the challenged lawsuit arose from an act in furtherance of her right of petition or free speech. From that fact the court may [effectively] presume the purpose of the action was to chill the defendant's exercise of First Amendment rights. It is then up to the plaintiff to rebut the presumption by showing a reasonable probability of success on the merits.

Id. at 61 (citation, internal quotes omitted; brackets in original). Relying on both the plain language of the statute and the legislative history, the Court concluded,

[O]ur anti-SLAPP statute utilizes a reasonable, objective test that lends itself to adjudication on pretrial motion. Such early resolution is consistent with the statutory design "to prevent SLAPPs by ending them early and without great cost to the SLAPP target."

Id. at 65 (citation omitted).

Consequently, the Court held that Equilon's allegedly "pure intentions" in suing Consumer Cause were "ultimately beside the point" because Equilon's lawsuit "expressly was based on Consumer Cause's activity in furtherance of its petition rights."

Id. at 67-68.

In City of Cotati, the Court reiterated Equilon's ruling that no showing of "intent to chill" is required under the anti-SLAPP statute. 29 Cal. 4th at 75. The Court then went further, rejecting the plaintiff's argument that a defendant should be required to show that the plaintiff's suit actually had a chilling effect on defendant's exercise of its rights, holding:

The same considerations of law and policy, generally, that bar judicial imposition on the anti-SLAPP statute of an intent-to-chill proof requirement bar judicial imposition of a chilling-effect proof requirement. ... Here, as in Equilon, supra, 29 Cal. 4th 53, the plain language of the statute and indicia of legislative intent preclude any such requirement.

Id. (citations omitted).

The Court ultimately held that the statute did not apply in City of Cotati because the lawsuit did not "arise from" protected activity. The City of Cotati had filed a declaratory relief action in state court regarding the validity of an ordinance after a similar action had been filed in federal court. The City admitted it was forum shopping; however, the Court held that this did not make the state court action a SLAPP suit because the City's "subjective intent ... is not relevant under the anti-SLAPP statute." Id. at 78. The Court explained

[T]he statutory phrase "cause of action ... arising from" means simply that the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech. ... In the anti-SLAPP context, the critical point is whether the plaintiff's cause of action itself was based on an act in furtherance of the defendant's right of petition or free speech."

Id. Because the City's suit was based on the ordinance and sought declaratory relief regarding its validity, it was not a SLAPP suit. Id. at 80. In contrast, Equilon had arisen "from Consumer Cause's activity in furtherance of its constitutional rights of speech or petition-viz., the filing of Proposition 65 intent-to-sue notices." 29 Cal. 4th at 67. It was a SLAPP suit because it directly challenged that activity.

Navellier was the Court's final and most expansive decision. 29 Cal. 4th 82. In Navellier, the majority of the Court held that an action grounded on purported wrongs by the defendant in an earlier lawsuit did "arise from" the defendant's protected activity in connection with a judicial proceeding and therefore was potentially subject to the anti-SLAPP statute. The plaintiff in Navellier had alleged fraud in connection with defendant's negotiation, execution and repudiation of a release in an earlier action, and also alleged a claim for breach of contract based on the defendant's filing of counterclaims in that action notwithstanding the release. Id. at 86-87. Citing Equilon, the Court again rejected the "intent to chill" argument on which the Court of Appeal had relied. Id. at 88-89. The Court then held that the case arose out of defendant's rights of petition because both claims were based on actions in connection with a judicial proceeding. The Court noted that "Sletten is being sued because of the affirmative counterclaims he filed in federal court" and thus the action "falls squarely within the ambit of the anti-SLAPP statute's 'arising from' prong."

Id. at 90.

Moving beyond the issues underlying Equilon and Cotati, the Court then rejected a number of arguments designed to limit the reach of the statute. First, the Court held that the statute applies to all causes of action. Plaintiff had argued that the case was "'a garden variety breach of contract and fraud claim' not covered by section 425.16." Id. at 90. The Court disagreed:

Nothing in the statute itself categorically excludes any particular type of action from its operation, and no court has the power to rewrite the statute so as to make it conform to a presumed intention which is not expressed.... For us to adopt such a narrowing construction, moreover, would contravene the Legislature's express command that section 425.16 "shall be construed broadly."

Id. at 92 (citations omitted).

The anti-SLAPP statute's definitional focus is not the form of the plaintiff's cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability-and whether that activity constitutes protected speech or petitioning.

Id.

Next, the Court rejected plaintiff's argument that the statute should not be applied because it would effectively immunize from suit anyone who breached a release agreement. In making this argument, the Court explained,"plaintiffs fall prey ... to the fallacy that the anti-SLAPP statute allows a defendant to escape the consequences of wrongful conduct by asserting a spurious First Amendment defense." Id. at 93 (citation omitted). The Court pointed out that the statute's test is two-pronged, and the plaintiff still can pursue its claims if it can establish they "possess minimal merit." Id. (citation omitted).

In fact, the statute does not bar a plaintiff from litigating an action that arises out of the defendant's free speech or petitioning ...; it subjects to potential dismissal only those actions in which plaintiff cannot "state[ ] and substantiate[ ] a legally sufficient claim."

Id. (citation omitted). Thus, a complaint may not be stricken if it "is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."

Id. (citation omitted).

Finally, the Court rejected the plaintiff's argument that the anti-SLAPP statute did not apply because the defendant's actions were not "valid." The Court explained that the "validity" of the defendant's conduct was relevant only to the second prong of the statute, not in determining its application:

That the Legislature expressed a concern in the statute's preamble with lawsuits that chill valid exercise of First Amendment rights does not mean that a court may read a separate proof-of-validity requirement into the operative sections of the statute.... Rather, any "claimed illegitimacy of the defendant's acts is an issue which the plaintiff must raise and support in the context of the discharge of the plaintiff's [secondary] burden to provide a prima facie showing of the merits of the plaintiff's case.

Id. at 94 (citations omitted; emphasis in original). The Court went on to explain that "[i]f this were the case then the [secondary] inquiry as to whether the plaintiff has established a probability of success would be superfluous." Id. (citations omitted). The Court then remanded for consideration of whether the plaintiff could establish a probability of prevailing in the suit, which the trial court had not addressed.

This trio of decisions builds upon the California Supreme Court's earlier mandates that the anti-SLAPP statute be applied broadly and with strict adherence to its language. Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th 1106, 81 Cal. Rptr. 2d 471 (1999) (no "public interest" requirement may be read into sections of statute that do not contain that requirement); Ketchum v. Moses, 24 Cal. 4th 1122, 104 Cal. Rptr. 2d 377 (2001) (fee-shifting in favor of successful defendant mandatory under statute's plain language). In the 10 years since the statute was enacted, the Court three times has granted review of SLAPP cases to resolve disputes among the Courts of Appeal and ensure that the statute is applied broadly. These decisions and the Legislature's 1997 amendment of the statute to direct that it be "construed broadly" demonstrate that the state's highest court, and the legislature, stand firmly behind the statute's current expansive scope.