Litigating California’s anti-SLAPP statute in federal court

By Marc Lewis and Matthew Paul

A strategic lawsuit against public participation (SLAPP) intends to censor, silence, or intimidate individuals by saddling them with a lawsuit until they are silenced. California's anti-SLAPP statute provides a broad and powerful weapon for defendants in such cases.

Most California litigators have at least heard of the statute. But most California attorneys do not know how the statute applies in federal court. Here we consider a defendant's ability to recover attorney fees and to strike claims with prejudice following Verizon v. Covad, the leading 9th Circuit opinion concerning the application of the anti-SLAPP law in federal court. Because the use of the anti-SLAPP statute in federal court raises difficult questions, many of which remain unsettled, California attorneys should be familiar with the complex and even contradictory case law.

We begin with a brief review of the anti-SLAPP law. The statute combats "meritless suit[s] filed primarily to chill the defendant's exercise of First Amendment rights." Dove Audio, Inc. v. Rosenfeld, Meyer & Susman, 47 Cal. App. 4th 777 (1996). The statute is broad; it protects any written or oral statement made "before a legislative, executive, or judicial body, or any other official proceeding authorized by law," in "connection with an issue under consideration or review" by such a body, or in "a place open to the public or a public forum in connection with an issue of public interest." Cal. Civ. Proc. Code Section 425.16(e).

Within sixty days of receiving a complaint, a defendant may move to strike under the anti-SLAPP statute. The defendant has the initial burden and must show that the action arises out of an act "in furtherance of the ... right of petition or free speech ... in connection with a public issue." Cal. Civ. Proc. Code Sections 425.16(b) & (f); Equilon Enter., LLC v. Consumer Cause, Inc., 29 Cal. 4th 53 (2002). Once the defendant makes this showing, the burden shifts and the plaintiff must establish a probability of success on the merits by demonstrating that "the complaint 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." Wilson v. Parker, Covert & Chidester, 28 Cal. 4th 811 (2002). The consequences are severe; if the plaintiff fails to establish a probability of success on any claim, the court must strike it.

The anti-SLAPP statute also has an aggressive fee-shifting provision. A defendant prevailing on an anti-SLAPP motion "shall" recover attorney fees and costs. Cal. Civ. Proc. Code Section 425.16(c)(1). However, "[i]f the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney fees to a plaintiff prevailing on the motion."

In 1999, the 9th Circuit examined the anti-SLAPP law and the authorization of attorney fees for a prevailing party in federal court. United States ex rel. Newsham v. Lockheed Missiles & Space Co., Inc., 190 F.3d 963 (9th Cir. 1999). Finding that there was no direct collision between the anti-SLAPP procedures and the Federal Rules of Civil Procedure, the 9th Circuit held that the anti-SLAPP law is generally applicable in federal court as to state law claims. This is perhaps the only settled principle concerning the application of the anti-SLAPP law in federal court.

Beyond this basic premise - that the statute is simply valid in federal court - difficult and unresolved questions remain concerning whether the anti-SLAPP law conflicts with the Federal Rules of Civil Procedure. In Verizon Delaware, Inc. v. Covad Communications Co., 377 F.3d 1081 (9th Cir. 2004), the 9th Circuit held that "granting a defendant's anti-SLAPP motion to strike a plaintiff's initial complaint without granting the plaintiff leave to amend would directly collide with Fed. R. Civ. P. 15(a)'s policy favoring liberal amendment." The 9th Circuit stated that "the purpose of the anti-SLAPP statute, the early dismissal of meritless claims, would still be served if plaintiffs eliminated the offending claims from their original complaint."

But what if a defendant files an anti-SLAPP motion and the plaintiff later withdraws the offending claims before the Court rules on the motion? In superior court, a defendant may obtain his fees. The Court of Appeal has held that a plaintiff may file an amended complaint after an anti-SLAPP motion to strike has been filed but before it has been decided. Sylmar Air Conditioning v. Pueblo Contracting Services, Inc., 122 Cal. App. 4th 1049 (2004). However, "a plaintiff may not avoid liability for attorney fees and costs by voluntarily dismissing a cause of action to which a SLAPP motion is directed." Thus, in superior court, if a plaintiff voluntarily dismisses one or more causes of action after an anti-SLAPP motion has been filed, the defendant still has a right to be heard on the merits of the motion and to recover attorney fees if successful. Moore v. Liu, 69 Cal. App. 4th 745 (1999).

But can a defendant in the same position in federal court obtain his fees? 9th Circuit precedent is far less clear largely due to Verizon, which concerned a request to amend the complaint before the district court had ruled on the anti-SLAPP motion. Some district courts have concluded that Verizon does not address whether leave to amend should be granted after an anti-SLAPP motion has been granted, and held that such an amendment is not permitted. Flores v. Emerich & Fike, 2006 WL 2536615 (E.D. Cal. Aug. 31, 2006); Roe v. Doe, 2009 WL 1883752 (N.D. Cal. June 30, 2009). However, in dicta from a 2010 opinion, the 9th Circuit characterized its earlier Verizon opinion as holding that leave to amend should be granted after an anti-SLAPP motion has been granted. Greensprings Baptist Christian Fellowship Trust v. Cilley, 629 F.3d 1064 (9th Cir. 2010). Based on this dicta, one district court has held that "federal district courts retain discretion to grant leave to amend" following the granting of an anti-SLAPP motion. Graham-Sult v. Clainos, 2011 WL 2531201 (N.D. Cal. June 24, 2011).

The 9th Circuit has not yet determined whether attorney fees may be recovered in federal court when a plaintiff voluntarily dismisses SLAPP claims before the district court has ruled on the anti-SLAPP motion. Yet several federal district courts in California have interpreted the 9th Circuit's Verizon decision as prohibiting such a recovery. One district court stated that "Verizon establishes that an award of attorneys' fees is not appropriate where the plaintiff eliminates the meritless state-law claims from the subsequently filed [amended] complaint." EchoStar Satellite, LLC v. Viewtech, Inc., 2009 WL 1668712 (S.D. Cal. May 27, 2009). Another district court similarly found that Verizon permits an award of attorney fees only if a plaintiff reasserts meritless claims in the amended complaint. Brown v. Electronic Arts, Inc., 722 F. Supp. 2d 1148 (C.D. Cal. 2010). Both cases quoted Verizon's assertion that "[t]he purpose of the anti-SLAPP statute, the early dismissal of meritless claims, would still be served if plaintiffs eliminated the offending claims from their original complaint," and accordingly found that an award of attorney fees would be unnecessary.

Despite these holdings, strong arguments remain for defendants seeking attorney fees in federal court after a plaintiff dismisses SLAPP claims. Verizon itself did not concern an award of attorney fees and is in no way controlling on the issue. And although "the early dismissal of meritless claims" is certainly one of the key purposes of the anti-SLAPP statute, its overall objective is to prevent plaintiffs from imposing the costs of opposing meritless claims upon defendants. Allowing a defendant to recover the costs incurred in filing a motion to strike furthers this objective without undermining the federal policy favoring liberal amendment of pleadings. Hopefully the 9th Circuit will take this argument to heart.

One lesson is clear: Plaintiffs' counsel contemplating an action in federal court should be aware that a defense lawyer could win his case, along with his attorney fees, with an anti-SLAPP motion. Thus, counsel should be careful in bringing California state law claims in federal court when federal claims could suffice. Similarly, defense counsel must keep the anti-SLAPP statute in mind when considering how to attack a complaint in federal court, even if it might be harder to obtain attorney fees in federal court.