9th Circuit judges call for an end to anti-SLAPP in federal court

Can a defendant use an anti-SLAPP motion to defeat a California law claim brought in federal district court? The answer today is "yes." But a recent 9th U.S. Circuit Court of Appeals decision suggests that the answer might soon change.

California's anti-SLAPP statute, Code of Civil Procedure Section 425.16, allows trial courts to strike certain lawsuits - those arising from acts of speech or petition on public issues - early in the litigation unless the plaintiff can establish a probability of prevailing on the merits. Anti-SLAPP motions have become increasingly common in recent years as litigation costs have climbed and judicial resources have declined.

Although anti-SLAPP motions are a creature of state law, their boom has not been limited to the state courts. The 9th Circuit decided more than a decade ago that defendants also can invoke California's anti-SLAPP statute to strike state law claims brought in federal court. United States ex rel. Newsham v. Lockheed Missiles & Space Co., Inc., 190 F.3d 963 (9th Cir. 1999).

It was not a foregone conclusion that federal courts would recognize a California anti-SLAPP motion. Federal courts adjudicating state law claims apply state law on substantive issues, but federal law on procedural issues. Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427 (1996). This rubric, known as the Erie doctrine, is designed to discourage forum-shopping and to avoid the inequitable administration of laws. It means that if the anti-SLAPP statute was viewed as strictly procedural, federal courts would not apply it.

Newsham, the first 9th Circuit decision to consider the issue, concluded that Erie dictates permitting California anti-SLAPP motions in federal court. Newsham viewed the anti-SLAPP statute as vindicating an "important, substantive state interest[]" - protecting the constitutional rights of free speech and petition. It further noted that permitting anti-SLAPP motions in federal court would discourage forum shopping. That's because anti-SLAPP motions are a way to quickly dispose of meritless claims and, if successful, entitle the defendant to attorney fees. If such a "unique weapon" existed in state court but not federal court, litigants pursuing meritless claims "would have a significant incentive to shop for a federal forum."

On the other side of the equation, Newsham found that anti-SLAPP motions do not directly collide with the Federal Rules of Civil Procedure. Newsham opined that although the Federal Rules of Civil Procedure create their own mechanisms for dealing with nonmeritorious claims - including motions to strike or dismiss, and for summary judgment - those mechanisms were not intended to be exclusive. The decision reasoned that the anti-SLAPP and federal mechanisms can co-exist, because a federal defendant that loses an anti-SLAPP motion can still file a Rule 12 motion to strike or dismiss and a Rule 56 summary judgment motion. Newsham thus concluded that California's anti-SLAPP statute could apply to a federal litigant's California law claims.

But the fact that federal courts recognize California anti-SLAPP motions does not mean that anti-SLAPP motions proceed identically in federal and state court. To the contrary, there is at least one key difference: the availability of discovery.

Under California law, an anti-SLAPP motion automatically stays all further discovery until the court rules on the motion. Code Civ. Proc. Section 425.16(g). Although the trial court can permit specified discovery for good cause, the default stay means that most state court plaintiffs have to oppose an anti-SLAPP motion - that is, to show a reasonable probability of success on the merits of their claim - without the benefit of discovery.

The 9th Circuit has rejected this discovery limitation for anti-SLAPP motions filed in federal court. In Metabolife Intern., Inc. v. Wornick, 264 F.3d 832 (9th Cir. 2001), the court stressed that Federal Rule of Civil Procedure 56 entitles a party to discovery of information that would be essential to a summary judgment opposition. In the 9th Circuit's view, allowing the defendant to test the plaintiff's case with an anti-SLAPP motion before the completion of discovery would "'collide'" with this rule. Federal courts in the 9th Circuit therefore do not apply the discovery-limiting provisions of the California anti-SLAPP statute as rigorously as in state court.

But a much more dramatic difference may soon be on the way: Two 9th Circuit judges recently called for their colleagues to consider en banc whether federal courts should permit state-law based anti-SLAPP motions at all.

In Makaeff v. Trump University LLC, 2013 DJDAR 4972 (9th Cir. Apr. 17, 2013), a 3-judge panel reversed an order denying a California anti-SLAPP motion. But two of the judges on the panel - Judges Alex Kozinski and Richard Paez - also wrote separately to say that while they agreed that the decision was correct under Newsham, that case was wrongly decided and its rule should be revisited

Judge Kozinski characterized California's anti-SLAPP statute as purely procedural: As he summed up, the statute "deals only with the conduct of the lawsuit; it creates no rights independent of existing litigation; and its only purpose is the swift termination of certain lawsuits the legislators believed to be unduly burdensome." Given his view that the statute is procedural, and the Erie rule that federal courts do not apply state rules of procedure, he would not recognize an anti-SLAPP motion in federal court.

Judge Kozinski also disagreed with Newsham's conclusion that an anti-SLAPP motion does not conflict with the Federal Rules of Civil Procedure. He emphasized that under the Federal Rules, the only pre-discovery test for plaintiff's claims is legal sufficiency, whereas the anti-SLAPP statute permits a pre-discovery test for factual sufficiency. Metabolife mitigated that conflict by holding that "discovery-limiting" anti-SLAPP provisions do not apply in federal court. But the result, according to Judge Kozinski, is a "hybrid procedure where neither the Federal Rules nor the state anti-SLAPP statute operate as designed." Categorizing that result as a "big mistake," Judge Kozinski called for the 9th Circuit to consider the issue en banc and "le[a]d the way back out of the wilderness" by deciding that anti-SLAPP motions are not cognizable in federal court.

Judge Paez separately concurred, agreeing with Judge Kozinski that the anti-SLAPP statute is "quintessentially procedural." As evidence of the procedural description, Judge Paez noted that the 9th Circuit applies different rules to different states' anti-SLAPP statutes - for example, a district court order denying a California anti-SLAPP motion is immediately appealable, but a district court order denying a Nevada anti-SLAPP motion is not. See DC Comics v. Pacific Pictures Corp., 706 F.3d 1009, 1016 (9th Cir. 2013); Metabolic Research, Inc. v. Ferrell, 693 F.3d 795 (9th Cir. 2012).

Judge Kozinski and Paez's concurrences do not change anything for now. Newsham remains binding on all district courts in the 9th Circuit and on 9th Circuit 3-judge panels, unless and until overruled by the 9th Circuit en banc or the U.S. Supreme Court. Until then, the anti-SLAPP statute remains a powerful remedy for federal defendants facing meritless California-law claims arising from protected acts of speech or petition. But en banc review could result in a new landscape and anti-SLAPP opponents are likely to push for such review - so stay tuned.