Another Bumper Crop of California Anti-SLAPP Opinions

As California experienced its third year of an epic drought, the state's appellate courts and the 9th Circuit Court of Appeals produced a bumper crop of opinions interpreting California's powerful anti-SLAPP statute. Enacted in 1992, California's anti-SLAPP statute (Civil Procedure Section 425.16 et seq.) is the nation's most heavily litigated statute that protects free speech and petitioning activities. In 2014, as in previous years, California's trial courts decided literally hundreds of anti-SLAPP motions and the state's appellate courts and the 9th Circuit issued over 30 published (e.g., citable) opinions involving the anti-SLAPP statute. We highlight key developments in 2014, organized by provisions of the anti-SLAPP statute.

PRONG ONE: Does the Anti-SLAPP Statute Apply?

Several appellate rulings in 2014 focused on the threshold question of whether the anti SLAPP statute is triggered by the defendants' challenged speech or petitioning activities (commonly referred to as "prong one" of the statute). Cal. Civ. Proc. § 425.16 (b)(1) & (e).

In Greater Los Angeles Agency on Deafness, Inc. v. Cable News Network, 742 F.3d 414, 425-426 (9th Cir. 2014), the 9th Circuit made it clear that California's anti-SLAPP statute is to be broadly construed in federal court. The court reversed the district court's ruling that the anti-SLAPP statute did not apply to a lawsuit brought by a deaf advocacy group against CNN for the network's decision not to provide closed captioning on all news videos published on CNN.com pending new video closed-captioning regulations from the FCC. It ruled that California's anti-SLAPP statute broadly applies where "an action directly targets the way a content provider chooses to deliver, present, or publish news content on matters of public interest, that action is based on conduct in furtherance of free speech rights and must withstand scrutiny under California's anti-SLAPP statute." The Court's ruling in GLAD v. CNN followed on the heels of the 9th Circuit's decision in Doe v. Gangland Productions, Inc., 730 F.3d 946 (9th Cir. 2013) (see GLAD, 742 F.3d at 422 ("Our decision in Doe v. Gangland (full citation omitted) "leads to this result"), where the court also reversed a district court opinion that had narrowly construed the anti-SLAPP statute.

In separate opinions in which the courts acknowledged the availability of the anti-SLAPP statute against actions for declaratory relief, courts reached different outcomes about whether the anti-SLAPP statute applied. See Gotterba v. Travolta, 228 Cal. App. 4th 35, 39-40 (2014) (although anti-SLAPP protection is available against declaratory relief actions, a former employee's lawsuit against his employer for declaratory judgment did not trigger anti-SLAPP protection because pre-litigation demand letters were merely evidence of the controversy between the parties and not any protected basis for the declaratory relief action); compare with Lunada Biomedical v. Nunez, 230 Cal. App. 4th 459 (2014) (declaratory relief action for alleged violations of the Consumer Legal Remedies Act triggered anti-SLAPP protection and the lawsuit was dismissed on the facts of the case).

In Old Republic v. Boccardo Law Firm, Inc., 230 Cal. App. 4th 859 (2014), in litigation that challenged the disbursement of settlement funds from a trust account, the court observed that in determining whether a cause of action arises from conduct protected by the anti-SLAPP statute, the focus is on the wrongful, injurious acts or omissions identified in the complaint, and whether those acts or omissions come within the statute's description of protected conduct. After determining that the withdrawal of funds was neither communicative nor related to an issue of public interest, the court held that the anti-SLAPP statute was not triggered, and it ruled that unless the wrongful conduct is communicative in character, it is protected by the anti-SLAPP statute only if it was undertaken in connection with an issue of public importance.

In California Public Employees' Retirement System v. Moody's, 226 Cal. App. 4th 643 (2014), a public employee retirement system sued credit rating agencies for negligent misrepresentation and negligent interference with prospective economic advantage. The trial court found that the agencies' speech was protected by the anti-SLAPP statute, but determined that the retirement system succeeded in showing a probability of prevailing on its claims. The retirement system filed a cross-appeal challenging the trial court's finding that the anti-SLAPP statute applied. The appellate court affirmed the trial court's denial of the anti-SLAPP motion and, holding that the ratings published by the defendants reflected an "ongoing discussion regarding the financial well-being of a significant investment opportunity that was of interest to a definable portion of the public," was subject to the anti-SLAPP statute. Id. at 251.

D'Arrigo Bros. of California v. United Farmworkers of America, 224 Cal. App. 4th 790 (2014), involved an employer's lawsuit against an employees' union for breach of contract brought after the union filed unfair labor practice complaints against the employer. The trial court denied the union's anti-SLAPP motion finding that the statute was not triggered. The appellate court reversed, noting that the union's alleged conduct "unquestionably constituted statements made in connection with an issue under consideration" by the Agricultural Labor Relations Board in an official adjudicatory proceeding authorized by the board. Id. at 797-800. The appellate court then went on to grant the union's motion in its entirety. Id. at 800-806.

In other anti-SLAPP rulings, reflecting the broad swath of free speech and petitioning activities in which the anti-SLAPP statute is often involved – including landlord-tenant disputes and communications connected to lawsuits – courts determined that the anti-SLAPP statute was not triggered. See Moriarty v. Larmar Management Corp., 224 Cal. App. 4th 125 (2014) (lawsuit brought by a residential tenant against landlords for harassment, wrongful eviction and other claims was not protected by the anti-SLAPP statute because the court determined that the landlord's lawsuit did not "arise out of" the landlord's earlier unlawful detainer default lawsuit and noted and distinguished earlier landlord-tenant disputes that triggered protection under the statute); Ulkarim v. Westfield LLC, 227 Cal. App. 4th 1266 (2014) (holding residential tenant's breach of contract and tort claims against landlord after unlawful detainer judgment were not protected by the statute and also analyzing earlier landlord-tenant disputes involving the anti-SLAPP statute); Optional Capital, Inc. v. Das Corporation, 222 Cal. App. 4th 1388 (2014) (anti-SLAPP statute was not triggered by lawsuit brought by a corporation against fiduciaries who allegedly looted corporate funds, because the defendants' alleged "conduct is not automatically protected merely because it is related to pending litigation," observing that the defendants' challenged conduct must "arise from the litigation," but finding that it did not, and distinguishing contrary anti-SLAPP appellate decisions).

PRONG TWO: Did Plaintiff Show a "Probability of Prevailing" on Their Claims?

In other appellate rulings in 2014, courts addressed the question of whether plaintiffs met their burden of demonstrating – with admissible evidence – a "probability of prevailing" on their claims. Cal. Civ. Proc. § 425.16 (b)(1). For example, in Hui v. Sturbaum, 222 Cal. App. 4th 1109 (2014), the court affirmed the trial court's dismissal of a defamation claim brought by a chiropractor against an insurance investigator based on statements allegedly made to a lawyer's assistant and to the California Department of Insurance. In Hardin v. PDX, Inc., 227 Cal. App. 4th 159 (2014), the court found that the plaintiffs' negligence and products liability claims against a software vendor, whose software allowed a pharmacy to make non-FDA required drug monographs available to its customers, met the "minimal showing of merit" to defeat the anti-SLAPP motion. Id. at 166.

Because "it is settled" that a claim for malicious prosecution is subject to an anti-SLAPP motion (see Jarrow Formulas Inc. v. LaMarche, 31 Cal. 4th 728, 734-734 (2003)), there is already a well-established body of California anti-SLAPP appellate decisions addressing such claims. In 2014, four more appellate decisions were added, three in which plaintiffs' malicious prosecution actions were dismissed using the anti-SLAPP statute (S.A. v. Maiden, 229 Cal. App. 4th 27 (2014) (family law motions do not give rise to malicious prosecution liability); Kenne v. Stennis, 230 Cal. App. 4th 953 (2014) (same); Roger Cleveland Golf Company, Inc. v. Krane & Smith, APC, 225 Cal. App. 4th 660 (2014) (dismissing product manufacturers' action) and one decision in which the plaintiffs overcame the anti-SLAPP motion by showing a probability of prevailing on their claims. Parrish v. Latham & Watkins, 229 Cal. App. 4th 264 (2014) (former employees' lawsuit against attorneys who had represented their employer in an earlier action for misappropriation of trade secrets).

Exemptions to the Anti-SLAPP Statute?

Six appellate rulings in 2014 analyzed whether a plaintiff 's lawsuit was exempt from the anti-SLAPP statute. Cal. Civ. Proc. § 425.17 & Flatley v. Mauro, 39 Cal. 4th 299, 320 (2006) (criminally illegal conduct is not protected by the anti-SLAPP statute).

In Stenehjem v. Sareen, 226 Cal. App. 4th 1405 (2014), after a former employee sued his former employer for defamation and other claims, the employer's chief executive officer filed a counterclaim for civil extortion. The former employee filed an anti-SLAPP motion, which the trial court granted. The appellate court reversed, holding that an email sent by the former employee accusing the chief executive officer of misconduct and threatening to file a qui tam action constituted extortion and was not protected by the anti-SLAPP statute. But in Zucchet v. Galardi, 229 Cal. App. 4th 1466 (2014), a city council member's lawsuit against a strip club owner for malicious prosecution based on the club owner's testimony in a federal fraud case did not fall within the "illegality" exemption to the anti-SLAPP statute because the council member failed to establish that the club owner's testimony was illegal as a matter of law.

In People v. McGraw-Hill Companies, Inc., 228 Cal. App. 4th 1382 (2014), after the Attorney General of California filed a lawsuit on behalf of "the People" against credit rating agencies for alleged violations of the California False Claims Act, the credit agencies filed an anti-SLAPP motion. The trial court denied the anti-SLAPP motion, ruling that the anti-SLAPP statute did not apply to a prosecutor's enforcement action, pursuant to CCP§ 425.16 (d). The appellate court dismissed the credit agencies' appeal, holding that the denial of an anti-SLAPP challenging an enforcement action brought in the name of the people was not subject to immediate appellate review under the anti-SLAPP statute.

The "public interest" exemption to the anti-SLAPP statute (CCP 425.17 (b)) was analyzed and found to exempt a lawsuit brought by a borrower against debt collectors and a lender for alleged violations of the Fair Debt Collections Practices Act. Tourgeman v. Nelson & Kennard, 222 Cal. App. 4th 1447 (2014).

Finally, the so-called "commercial speech" exemption to the anti-SLAPP statute (CCP 425.17 (c)), was found by the appellate court to be satisfied by the plaintiff in Demetriades v. Yelp Inc., 228 Cal. App. 4th 294 (2014), reversing the granting of an anti-SLAPP motion in a lawsuit filed by a restaurant owner asserting claims for false advertising and seeking injunctive relief.

Although Californians collectively hope that the state will emerge from its drought in 2015, meantime, given the growing and steadfast use of California's anti-SLAPP statute, there is little prospect that the harvest of anti-SLAPP appellate rulings in 2015 will be any less bountiful.

Mr. Burke is a Partner and Co-Chair of the Media Practice at Davis Wright Tremaine LLP. He is also the author of Anti-SLAPP Litigation (The Rutter Group 2013-2014). Ms. Adler is a Counsel with the firm. Mr. Burke and Ms. Adler practice in the San Francisco office of the firm.