[VAR & VSEA] Attorney General of California declares Varian SLAPP trial a harmful error!
"BRIEF OF AMICUS CURAIE BILL LOCKYER, ATTORNEY GENERAL OF THE STATE OF CALIFORNIA, IN SUPPORT OF DEFENDANTS/APPELLANTS MICHELANGELO DELFINO, et al.
IN THE SUPREME COURT OF THE STATE OF CALIFORNIA
VARIAN MEDICAL SYSTEMS, INC., et al.,
Plaintiffs and Respondents
v.
MICHELANGELO DELFINO, et al.,
Defendants and Appellants.
INTRODUCTION
This Court is asked to decide an issue that goes to the heart of the anti-SLAPP1 statute-whether the trial court must stay proceedings pending an appeal from the denial of a special motion to strike under Code of Civil Procedure section 425.15. The Court's answer will determine whether victims of SLAPP suits are given the protection that the Legislature intended, or must face the daunting possibility of having to litigate meritless actions while their appeals are pending.
In enacting the anti-SLAPP statute, the Legislature recognized that having to litigate a potentially meritless claim imposed a significant burden on private citizens and public interest groups that had done nothing more than exercise their First Amendment rights to speak out and petition the government. This Court itself acknowledged the in terrorem effect of such lawsuits. "Intimidation will naturally exist anytime a community member is sued by an organization for millions of dollar even if it is probable that the suit will be dismissed" (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 60, quoting Comment, Strategic Lawsuits Against Public Participation: An Analysis of the Solutions (1991) 27 Cal. Western L. rev. 399, 405.) Apart from the threat of damages, the certainty of having to incur significant attorneys fees and costs to defend against a SLAPP will deter many defendants from speaking out, and even the award of attorneys fees to a defendant after the litigation is concluded is not sufficient to eliminate this threat.
The California Legislature therefore did more than simply provide defendants with a new defense to a meritless action or with an award of attorneys fees at the conclusion of the action. It provided a defense-the special motion to strike-that could be exercised quickly and economically before significant litigation costs had to be incurred. This defense is designed to protect the defendant from the burdens of having to litigate a meritless case. Under the court of appeal ruling, however, a SLAPP victim can be forced to litigate a potential SLAPP while its appeal of the motion to strike is pending. The ruling therefore undermines the protections of the anti-SLAPP statute and subjects SLAPP victims to exactly the harm that the Legislature intended to remedy.
For the reasons set forth below, the Attorney General respectfully requests that the Court effectuate the Legislature's intent to protect SLAPP victims by staying proceedings in the trial court pending resolution of an appeal from the denial of the motion to strike.
1. SLAPP is the acronym for Strategic Lawsuit Against Public Participation.
INTEREST OF AMICUS CURIAE
The Attorney General is the chief law officer of the State of California and, as such, has authority to file actions he deems necessary to safeguard the public interest. (See Cal. Const., art. V, § 13; Cal. Gov. Code, §§ 12511, 12600-612; D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 14-15.) This brief is submitted pursuant to California Rules of Court, rule 13(b), in the exercise of the Attorney General's independent constitutional, statuatory, and common law power to represent the public interest.
The paradigmatic SLAPP suit is a meritless lawsuit brought by powerful interests against private citizens, not to vindicate a right, but rather to obtain an economic advantage over the defendants through the burdens of litigation, and to prevent the defendants from exercising their protected First Amendment rights, or to punish them for the exercise of those rights. The "anti-SLAPP" statute protects the rights of citizens to participate in the political process and to exercise their free speech and petition rights by providing for a motion to strike meritless claims arising from protected activity.
As the chief law officer of the State, the Attorney General has an interest in ensuring that the anti-SLAPP statute is interpreted in a manner that enables citizens quickly to resolve frivolous claims that arise from protected First Amendment activity.
FACTS AND PROCEDURAL BACKGROUND
The record before the Court is full of the details of the underlying accusations and the trial proceedings.2 None are relevant to the issue here, except the following: Appellants Delfino and Day posted derogatory statements on the Internet about Varian Medical Systems, Inc. (Varian) and the individual plaintiffs. Varian and the individual plaintiffs sued appellants Delfino and Day for defamation and other torts based on Internet postings. Delfino and Day filed a motion to strike the action under Code of Civil Procedure section 425.16,3 which was denied. They appealed, and the trial court refused to stay the action during the pendency of the appeal. The matter went to trial and a jury ruled against Delfino and Day, awarding the plaintiffs $425,000 in damages and $350,000 in punitive damages. (Varian Medical Systems, Inc., et al. v. Michelangelo Delfino, et al. (Court of Appeal of the state of California, Sixth Appellate District, No. H024214) (Nov. 13, 2003) at pp. 1-6 (hereinafter "Opinion").) After the jury verdict, the court of appeal dismissed as moot the appeal of the motion to strike. Delfino and Day then appealed from the judgment against them and argued that, because their appeal of the motion to strike stayed the entire action pursuant to Code of Civil Procedure section 916, the trial court lacked jurisdiction to hear the case. (Opinion. at pp.5-6.)
The court of appeal held that the trial court was not required to stay the trial during the pendency of the appeal, reasoning the the trial was not "a matter that is affected by an order denying an anti-SLAPP motion," and the trial of the matter would have no direct impact on the appeal. (Opinion at p. 34) The court parsed the only four outcomes that it perceived would occur as a result of refusing to stay the litigation. First, if the court of appeal affirms the trial court's grant of the motion to strike prior to entry of judgment, the matter will be dismissed. Second, if the court of appeal reverses an order granting the motion to strike prior to entry of judgment, the trial will simply proceed. Third, if judgment is entered for the defendant, the court of appeal will proceed to consider defendant's entitlement to the motion to strike, and, if it rules in favor of the defendant, will award attorney's fees to the defendant. Fourth, and finally, if judgment is entered for the plaintiff, there is no reason for the court of appeal to proceed to consider the issue of the motion to strike, and the appeal becomes moot. (Id. at p. 36) The court of appeal incorrectly assumed that none of these outcomes poses any problem to the SLAPP defendant.
2. The Attorney General takes no position on the facts of the case or on the appropriate remedy, and he files this brief only to urge this Court to interpret the anti-SLAPP statute in a manner consistent with its purpose and the intent of the Legislature.
3. All further statutory references are to the Code of Civil Procedure unless otherwise noted.
RELEVANT STATUTES
The Anti-SLAPP Statute
A classic SLAPP suit is intended, not to vindicate a right of the plaintiff, but rather to "tie up the defendant's resources for a sufficient length of time" and thereby to prevent the defendant from exercising its protected First Amendment rights or to punish it for doing so. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 816.) The purpose of the anti-SLAPP statute is to "prevent SLAPPs by ending them early and without great cost to the SLAPP target." (Equilon, supra, 29 Cal.4th at 65, quoting Tate, California's Anti-SLAPP Legislation: A Summary of and Commentary on Its Operation and Scope (2000) 33 Loyola L.A. L. re. 801.)
Section 425.16 provides that, except in specified circumstances not present here, a cause of action against a person "arising from any act of that person in furtherance of the person's right of petition or free speech... in connection with a public issue shall be subject to a special motion to strike unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." (Code Civ. Proc., § 425.16, subd. (b)(1).)4 The statute itself lists the type of activities that are protected, including statements made at legislative, executive, judicial, or other official proceedings, or in connection with issues under consideration at such proceedings, statements made in public in connection with an issue of public interest, or any other conduct in furtherance of the right of petition or free speech in connection with a public issue or issue of public interest. (§ 425.16, subds. (e)(1), (2), (3), (4).)
The anti-SLAPP statute further provides that, when a court grants or denies the special motion to strike, the losing party has a right to an immediate appeal.5 (§ 425.16, subd. (j)["An order granting or denying a special motion to strike shall be appealable under Section 904.1.") Finally, when a court has granted the motion to strike, it must award attorney fees to the defendant. When the court denies the motion to strike it must award attorneys fees to the plaintiff if the motion was frivolous or brought solely to cause unnecessary delay. (§ 425.16, subd. (c).)
Code of civil Procedure Section 916
Code of Civil Procedure section 916 provides that the perfecting of an appeal stays proceedings in the trial court "upon the judgment or order appealed from or upon the matters embraced therein or affected thereby...." Thus, a duly perfected appeal divests the trial court of jurisdiction over matters embraced within the appealed judgment or order, but not of collateral matters. (Sacks v. Superior Court (1948) 31 Cal.2d 537, 540; In re Waters's Estate (1919) 181 Cal.584,585.) The purpose of the automatic stay is to protect the appellate court's jurisdiction and prevent the trial court from rendering the appeal futile. (Townsel v. Superior Court (1999) 20 Cal. 4th 1084, 1089.) Accordingly, in deciding whether further proceedings on the merits would have an impact on the effectiveness of the appeal. (In re Marriage of Varner (1998) 68 Cal.App.4th 932, 936; Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629.)
4. Section 425.17 states that the motion to strike can not be brought against certain public interest plaintiffs (§ 425.17, subd. (b)), and can not be brought by certain defendants engaged in business activities. (§ 425.17, subd. (c).)
5. No such appeal may be taken from an order denying a motion to strike on the grounds that the motion is expressly prohibited by statute pursuant to sections 425.17(b) and (c). (§ 425.17, subd. (e).)
ARGUMENT
I. AN APPEAL FROM THE DENIAL OF A MOTION TO STRIKE AUTOMATICALLY STAYS FURTHER PROCEEDINGS ON THE TRIAL OF PLAINTIFF'S CLAIM
A. In Enacting Section 425.16 the Legislature Correctly Understood and Intended that the Appeal of the Motion to Strike Would Stay Proceedings in the Trial Court
There can be no reasonable doubt that, when the Legislature enacted the immediate appeal provision of section 425.16(j), it understood and intended that an appeal of the motion to strike thereby stayed trial proceedings on the challenged claim.
The anti-SLAPP statute was enacted to remedy what the Legislature viewed as a significant abuse of the judicial process - the use of meritless lawsuits to deter individuals and organizations from exercising protected First Amendment rights. (§ 425.16, subd.(a).) There are two aspects to this abuse. The first is the threat of enormous damage awards against a defendant who has simply exercised his First Amendment rights to speak out. (See Equilon, supra, 29 Cal.4th at 60.) The second is the attorneys fees and costs that the defendant must incur in defending against the meritless suit.
Recognizing that this second threat can be as potent as the first, the Legislature created the special motion to strike, which enables the defendant to challenge the SLAPP and end it early "without great cost to the SLAPP target." (Equilon, supra, 29 Cal.4th at 65, quoting Tate, California's Anti-SLAPP Legislation: A Summary of and Commentary on Its Operation and Scope (2000) 33 Loyola L.A. Rev. 801.) As part of the remedial scheme, the Legislature included several procedures to ensure a quick and economical dismissal of SLAPPs, including the immediate filing and speedy resolution of the motion to strike (§ 425.16, subd. (f)), and the stay of all discovery unless the court deems limited discovery necessary to resolve the motion. (§ 425.16, subd. (g).)
As the anti-SLAPP statute was originally written, however, a denial of a motion to strike was not immediately appealable. (See Stats. 1992, Ch. 726, § 2.) Thus, if the trial court wrongly denied the motion to strike, the SLAPP victim would be forced to litigate the SLAPP. Even if the order denying the motion to strike was ultimately overturned on appeal, the plaintiff would have succeeded in subjecting his opponent to significant costs and distress, thereby accomplishing indirectly, what he could not accomplish directly, and subverting the Legislature's intent to provide a fast and inexpensive method of dismissing SLAPPs. (See Roberts v. Los Angeles County Bar Association (2003) 105 Cal.App.4th 604, 613 [permitting plaintiff to file amended complaint after motion to dismiss is granted would enable the plaintiff to "accomplish indirectly what could not be accomplished directly, i.e., depleting the defendants' energy and draining his or her resources"], quoting Simmons v. Allstate Ins. Co. (2001) 92 Cal.App.4th 1068, 1073-74.) Furthermore, an after-the-fact payment of attorneys fees to the SLAPP victim would not compensate for the enormous burden, both financial and psychological, in having to defend against the SLAPP.6
Recognizing the enormity of the burden imposed on the SLAPP defendant by forcing it to defend at trial, the Legislature amended the SLAPP statute to provide that the grant or denial of the motion to strike is immediately appealable (Stats. 1999, Ch. 960, § § 1,2, [urgency].) As the Legislature repeatedly explained, the purpose of the immediate appeal was to stay the trial court proceedings on the challenged causes of action. Among the statements in the legislative history of the statute are the following:7
This bill [Assembly Bill 1675] would provide that an order granting or denying a special motion to strike shall be immediately appealable, and therefore, the perfecting of the appeal would stay proceedings in the trial court.8
[T]he perfecting of the appeal would stay proceedings in the trial court.9
This bill would make those stay and appeals provisions inapplicable when a trial court denies a special motion to strike on the grounds that a cause of action is exempt pursuant to this bill.10
The Legislature could not have spoken more clearly: The immediate appeal provision of the anti-SLAPP statute was enacted to stay the underlying proceedings in the trial court as to the challenged causes of action.11
B. The Language of Code of Civil Procedure Section 916, Read Together with Section 425.16, Mandates a Stay of the Trial Court Proceedings
As noted above, Code of Civil Procedure section 916 requires a stay of trial proceedings that are embraced in and affected by the order on appeal. In essence, the question presented by the motion to strike under section 425.16 is whether the trial should go forward. Thus, the motion to strike is at the very heart of the trial court's decision to proceed with trial on the challenged claim. The trial itself is therefore a "matter affected by" the motion to strike.
Furthermore, the motion to strike "embraces" the same matters that would be decided at trial. The motion to strike is intended to pierce the pleadings and require an evidentiary showing. (Roberts, supra, 105 Cal.App.4th at 613.) It asks the trial court to determine , at an early stage, whether the cause of action has possible merit. Thus, the decision on the motion to strike embraces a preliminary version of the exact same substantive question that will ultimately be determined at trial - whether the plaintiff can prove his claim. For this reason, the only court of appeal to have addressed this issue concluded that the appeal of the denial of a motion to strike stays the underlying proceedings because the motion to strike challenged the legal viability of the underlying claim. (Mattel, Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th 1179, 1190.)12
C. The Stay of the Trial Proceedings is Consistent with the Purpose of Section 916
The purpose of the stay under section 916 is to protect the jurisdiction of the court of appeal and prevent the appeal from being futile. (See Townsel, 20 Cal.4th at 1089 [The rule depriving the trial court of jurisdiction during a pending appeal "prevents the trial court from rendering an appeal futile by... conducting other proceedings that may affect it."]. quoting Betz v. Pankow (1993) 16 Cal.App.4th 931, 938.) As demonstrated by the legislative history cited above, the purpose of the Legislature in providing for the immediate appeal of the special motion to strike was to protect the defendant form having to undergo the rigors of trial. If the trial court wrongfully denies the motion to strike and proceeds with trial on a meritless claim, the SLAPP victim has suffered the very wrong intended to be avoided by the statute. (See Baltzel v. Smith (2003) 333 F.3d 1018, 1025. [" a defendant's rights under the anti-SLAPP statute are in the nature of immunity: They protect the defendant form the burdens of trial, not merely from ultimate judgments of liability."].) Permitting the trial to proceed pending the appeal of the motion to strike renders the appeal futile. Thus, in order to preserve the SLAPP victim's remedy, and to avoid rendering the appeal futile, the Court should clarify that an appeal of an order denying the motion to strike stays all proceedings on the challenged cause of action.
D. Any Argument that the Stay Should be Discretionary Must be Made to the Legislature, not the Courts
In issuing its decision, the court of appeal made it clear that it was concerned that a mandatory stay of the trial proceedings will leave the anti-SLAPP statute open to abuse by defendants who file frivolous motions to strike. The court concluded that the danger of wrongfully denying a stay is "outweighed by the danger of encouraging meritless anti-SLAPP motions and appeals as trial strategy to simply delay the trial of meritorious cases." (Opinion at p. 37.)
Such an analysis might be appropriate were the court of appeal writing on a blank slate. It was not. The Legislature has already performed the necessary balancing and has carefully crafted a scheme for disposing of SLAPPS "quickly and at minimal expense to taxpayers and litigants" (Equilon, supra, 29 Cal.4th at 66), while also protecting the rights of legitimate plaintiffs. In enacting the anti-SLAPP statute and its amendments, the Legislature included significant protections for legitimate plaintiffs, including the two-part anti-SLAPP test (see Sauson Partnership v. Ochoa (2003) 112 Cal.App.4th 1005, 1017, the mandatory award of attorneys fees for frivolous anti-SLAPP motions (see Moore v. Shaw (2204) 116 Cal.App.4th 182, 198-99), the exemptions from the motion to strike (§ § 425.17, subds. (b), (c)), and the denial of the immediate appeal in certain circumstances (§ 425.17, subd. (e)). It is neither necessary nor proper for the courts to add additional restraints to the statute.
As this Court concluded in addressing another proposed restraint on the anti-SLAPP statute, "We discern no grounds for second-guessing the Legislature's considered policy judgment." (Equilon, supra, 29 Cal.4th at p. 67 [declining to add an "intent" requirement to the anti-SLAPP statute].) Thus, any argument that the stay provision should be discretionary rather than mandatory must be made to the Legislature, not the courts. (See Briggs v. Eden Council for Hope and Opportunity (1999) 19 Cal.4th 1106, 1123 [declining to second guess the Legislature in determining what is adequate to protect legitimate claims from meritless motions to strike]; Moraga-Orinda Fire Protection District v. Weir (2004) 115 Cal.App.4th 477, 482 [argument that fee award under section 425.16(c) should be discretionary is better directed to the Legislature, rather than the courts].)
Furthermore, the courts are not without remedies of their own to curb abuse of the anti-SLAPP statute. Courts confronting abusive motions to strike can "deny, mitigate, or even sanction them when appropriate." (Equilon 29 Cal.4th at 66; see also Moraga-Orinda Fire Protection District, supra, 115 Cal.App.4th at 481 [if SLAPP motion to strike is abused, Legislature has authorized prevailing plaintiff to recover sanctions].)
Courts also have inherent authority to dismiss facially meritless SLAPP appeals. For example, in People v. Brar (2004) 115 Cal.App.4th 1315, the court of appeal struck a frivolous appeal of an anti-SLAPP ruling in order to prevent abuse of the anti-SLAPP statute. The court further exercised its authority to shorten the time for finality of its decision to five days after the filing date, and noted that the Attorney General retained the authority to seek sanctions against Brar for a frivolous filing. (Id. at pp. 1318-1320.)
Thus, significant protections for legitimate plaintiffs are built into the statute itself, and the courts can enhance those protections as appropriate by exercising their inherent authority to impose sanctions, to strike facially frivolous motions, and to speed up the appellate process. If additional protections are required, they must be sought from the Legislature.
6. This was recognized by the Ninth Circuit Court of Appeals in Baltzel v. Smith (2003) 333 F.3d 1018, cert. denied, 2004 WL 406485, 72 USLW 3568 (June 7, 2004). There, the Ninth Circuit noted that "a defendant's rights under the anti-SLAPP state are in the nature of immunity: They protect the defendant from the burdens of trial, mot merely from ultimate judgments of liability." (Id. at 1025) The court further recognized that even a subsequent decision by the reviewing court granting the motion to strike, and the accompanying award of attorneys fees, would not remedy the fact that the defendant was "compelled to defend against a meritless claim brought to chill rights of free expression." (Id. at 1025.)
7. The relevant legislative history is recited in detail in Appellant's Opening Brief at pp. 9-10. The Attorney General therefore does not repeat the entire history here, and only directs the Court's attention to several of the critical legislative comments.
8. Sen. Com. on Judiciary, Analysis of Assem. Bill No. 1675 (1999-2000 Reg. Sess.) as amended May 28, 1999, p. 3. (Emphasis added.)
9. Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 1675 (1999-2000 Reg. Sess.) as amended July 12, 1999, p. 2. (Emphasis added.)
10. Sen. Com. on Judiciary, Analysis of Sen. Bill No. 515 (2003-2004 Reg. Sess.) as amended May 1, 2003, p. 4.) (Emphasis added.)
11. Of course, the trial court proceedings can continue as to other causes of action that were not challenged by the motion to strike.
12. Varian attempts to distinguish Mattel by noting that the court there stayed the trial before it occurred, rather than setting aside a post-trial judgment. This is a distinction without a difference, since the procedural posture of the case is irrelevant. The question before this Court is whether the trial court erred in refusing to stay the trial pending the appeal, and that question is independent of the events that occurred at a trial or thereafter.
CONCLUSION
When a citizen, an environmental group, or a public interest group is SLAPPed for having exercised its First Amendment rights, it has faced, not just with the possibility of having to pay damages, but also with the certainty of having to incur significant attorneys fees in defending against the meritless action. The Legislature enacted the anti-SLAPP statute to provide a speedy and cost effective means for SLAPP victims to get rid of meritless lawsuits. In order to protect the SLAPP defendant, the Legislature provided for an immediate appeal from the denial of the motion to strike, thus ensuring that proceedings in the trial court would be stayed during the pendency of the appeal. To hold otherwise would undo the protections created by the SLAPP statute and subject SLAPP victims to exactly the harm the Legislature intended to remedy.
The Attorney General therefore respectfully requests that this Court preserve the protections giving to SLAPP victims by the Legislature, including the stay of trial court proceedings pending the appeal of the motion to strike.
Dated: June 11, 2004
Respectfully submitted,
BILL LOCKYER
Attorney General
MANUEL M. MEDEIROS
State Solicitor General
TOM GREENE
Chief Assistant Attorney General
THEODARA BERGER
Senior Assistant Attorney General
EDWARD G. WEIL
Supervising Deputy Attorney General
SUSAN S. FIERING
Deputy Attorney General"
geocities.com |
