Gary A. Watt
Partner, Hanson Bridgett LLP
State Bar Approved, Certified Appellate Specialist
Email: gwatt@hansonbridgett.com
Gary chairs Hanson Bridgett's Appellate Practice. He is a State Bar-approved, certified appellate specialist. In addition to writs and appeals, his practice includes anti-SLAPP and post-trial motions as well as trial and appellate consulting. His blog posts can be read at www.appellateinsight.com.
Rosanna W. Gan
Associate, Hanson Bridgett LLP
Email: rgan@hansonbridgett.com
Boston Univ SOL; Boston MA
Rosanna focuses on IP litigation and appellate work.
In Sweetwater Union High School Dist. v. Gilbane Building Co., 6 Cal. 5th 931 (2019), the California Supreme Court examined the form and admissibility of evidence in the context of the anti-SLAPP statute, Code of Civil Procedure Section 425.16. Despite resolving what it described as narrow anti-SLAPP questions, the opinion has implications for summary judgment. In Sweetwater, did the Supreme Court open a new door for those seeking to avoid summary judgment? Has the door been there all along, overlooked by courts and counsel?
Sweetwater & the Anti-SLAPP Statute
The well-charted anti-SLAPP terrain has two prongs. Under Prong One, the moving party's burden is to demonstrate that the complaint bases liability on protected activity. Rand Resources, LLC v. City of Carson, 6 Cal. 5th 610, 620 (2019). If the moving party makes that showing, then under Prong Two, the opposing party has the burden of demonstrating a case with minimal merit. The court describes Prong Two as "a summary-judgment-like procedure." Taus v. Loftus, 40 Cal. 4th 683, 714 (2007). Under Prong Two, courts do not weigh evidence or resolve conflicting factual claims. The inquiry "is limited to whether the plaintiff [or cross-claimant in some cases] has stated a legally sufficient claim." Baral v. Schnitt, 1 Cal. 5th 376, 384-85 (2016). Courts accept the opposing party's evidence as true, evaluating the moving party's showing only to determine if it defeats the opposing party's claim as a matter of law.
Sweetwater involved Prong Two. In Sweetwater, a school district sued defendants to void contracts and for disgorgement. The district alleged that during a bond measure campaign, the defendants bribed various district officials. Defendants responded with an anti-SLAPP motion, maintaining that certain political contributions, charitable donations, and gifts provided to political officials constituted protected activity.
The trial court denied defendants' anti-SLAPP motion on the grounds that all of the alleged conduct underlying the complaint was illegal as a matter of law. See, e.g., Flatley v. Mauro, 39 Cal. 4th 299, 317 (2006) (anti-SLAPP motion not cognizable where conduct at issue is wholly illegal). The Court of Appeal disagreed with the lower court's illegality ruling but affirmed because the school district demonstrated that its case had minimal merit. The district met its Prong Two burden by submitting various documents from a criminal investigation into defendants' conduct, including plea forms and grand jury testimony excerpts.
The Supreme Court granted review to address the issue of a plaintiff's evidentiary burden on Prong Two, specifically, the form and admissibility of evidence.
Sweetwater's Form of Evidence Analysis
The Supreme Court first addressed the form of the evidence the district submitted. As to the plea forms, defendants argued that such documents are not "affidavits" and contain hearsay, so the documents should not be considered when resolving Prong Two. However, the court rejected defendants' objections because like affidavits, those documents contained attestations of truthfulness made under penalty of perjury under California law. So while the anti-SLAPP statute referred only to "affidavits," documents forming the "equivalents" of affidavits can be used to satisfy Prong Two.
With respect to the excerpts of grand jury testimony, the court found that similar assurances of reliability are built in because such testimony is given under oath, leaving only the authenticity of such transcripts to be established in a given case. The court reasoned that considering such transcripts from other disputes and proceedings is "consistent with the purposes of the [anti-SLAPP] Act" given that the filing of an anti-SLAPP motion stays discovery and the party opposing the motion must nevertheless "substantiate[] a legally sufficient claim." Sweetwater, 6 Cal. 5th at 943.
Sweetwater's Admissibility Analysis
Next, the Supreme Court turned to admissibility. Defendants asserted that unless the former testimony and other hearsay exceptions are established on Prong Two, evidence should be excluded. The court rejected that argument because "In the anti-SLAPP motion context ... reliability stems from the oath-taking procedures" built into such documents, and the documents are used to determine whether "evidence exists," not to demonstrate actual trial admissibility at the anti-SLAPP motion stage. Id. at 944-45.
The court analogized to the summary judgment statute, Code of Civil Procedure Section 437c, noting the similar purposes behind the two schemes: to "weed out meritless suits" (anti-SLAPP) and to determine if "trial is in fact necessary" (summary judgment). However, in discussing summary judgment, the court emphasized that "'section 437c has always required evidence relied on in supporting or opposing papers to be admissible.'" Id. at 945, quoting Perry v. Bakewell Hawthorne, LLC, 2 Cal. 5th 536, 542 (2017) (emphasis original). But admissible at the motion stage, or later at trial?
Interestingly, the court declared that "to the extent both schemes are designed to determine whether a suit should be allowed to move forward, both schemes should require a showing based on evidence potentially admissible at trial." Sweetwater, 6 Cal. 5th at 945 (emphasis added). But then the court turned to prior anti-SLAPP decisions characterizing the Prong Two burden as demonstrating evidence actually admissible at the motion stage. The court even cited one of its prior opinions stating that courts should "'determine whether the plaintiff's showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment.'" Id. at 946, quoting Baral, 1 Cal. 5th at 396. In other words, the court's examples seemed focused on actual, not potential, admissibility.
Nonetheless, the Sweetwater court's ultimate conclusion appeared to lock-in on potential admissibility. The court explained that "evidence may be considered at the anti-SLAPP motion stage if it is reasonably possible the evidence ... will be admissible at trial." Id. at 947 (emphasis added). In making that point, the court discussed cases supporting "the distinction between evidence that may be admissible at trial and evidence that could never be admitted." Id. at 948 (emphasis original). The court likened the latter type to "'the sort of evidentiary problem a plaintiff will be incapable of curing by the time of trial.'" Ibid., quoting Gallagher v. Connell, 123 Cal. App. 4th 1260, 1269 (2004) (emphasis added).
Sweetwater's "Reasonable Possibility" Standard & Summary Judgment
Is Sweetwater's pragmatic approach to admissibility confined to the anti-SLAPP context? As Sweetwater noted, anti-SLAPP motions are typically resolved prior to discovery, so judicial scrutiny of evidence for the "reasonable possibility" of admissibility at trial makes sense. The purpose of the anti-SLAPP motion is to weed out meritless claims based on protected activity, not to prematurely kill difficult-to-prove ones prior to discovery.
By contrast, summary judgment motions typically occur after discovery has been taken and the products of discovery make up the evidence submitted. In addition, Section 437c, subdivision (d) requires that affidavits and declarations "set forth admissible evidence." (Emphasis added.) And courts ruling on a summary judgment motion "shall consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained." Subd. (c). Does this mean that on summary judgment, courts are correct in requiring strict admissibility and not Sweetwater's reasonable possibility of admission? It wasn't that long ago that the court reversed a denial of summary judgment by focusing on admissibility at the summary judgment stage. Perry, 2 Cal. 5th at 542-43. So if parties opposing summary judgment cannot demonstrate how the evidence is admissible, should they receive a pass because they might make the showing -- or solve the problem -- later at trial?
Sweetwater's implications for summary judgment linger. Summary judgment has been described as necessary to avoid useless trials. Is a trial "useless" because at the summary judgment stage, admissibility issues have not all been resolved? Sweetwater, and Perry too, seem to say "no." In distinguishing cases that could survive an anti-SLAPP motion from those that could not, Sweetwater cited to cases where the admissibility problem was demonstrably incurable. Perry involved summary judgment, and the Sweetwater court described Perry as turning on evidence "incurably inadmissible at trial" such that "it could not properly be considered in ruling on a summary judgment motion." The court, contrasting the evidence issues in Sweetwater with those of Perry, held that evidence should not be excluded absent a "categorical bar" or "undisputed factual circumstances suggesting the evidence would be inadmissible at trial." Sweetwater, 6 Cal. 5th at 949.
Sweetwater has already affected at least one type of evidence on summary judgment. Sweetwater quietly resolved a split in the appellate courts regarding transcript testimony from another proceeding. Some courts considered such testimony as equivalent to a declaration or affidavit and admissible during summary judgment, while others found it functionally distinct and excluded as hearsay. The Sweetwater decision agreed with the former, disapproving of the latter. Id. at 944 n.8. An unpublished decision has already acknowledged this change, holding that a trial court's exclusion of arbitration deposition testimony during summary judgment was improper in light of the intervening Sweetwater decision. Daldumyan v. Mehrian, 2019 WL 1747762, at *4 (2019).
Have cases excluded evidence on summary judgment that was not "incurably inadmissible?" In Serri v. Santa Clara University, 226 Cal. App. 4th 830, 855 (2014), the court excluded evidence that was not properly authenticated. In opposition to summary judgment, the plaintiff offered more than 20 exhibits that consisted of handwritten notes, alleging the notes were written by a defendant. But the plaintiff failed to authenticate the notes, some of which also documented conversations and were therefore hearsay. Given Sweetwater, which states that a lack of authentication does not always make evidence "incurably inadmissible," how might the analysis in Serri have changed?
Should the fact that the summary judgment statute is a trial-necessity device make the admissibility standard more rigorous than that of the statutory SLAPP-screening device? Intuitively, it seems so. However, "the purpose of the summary judgment procedure is not to try the issues but merely to discover ... whether the parties possess evidence which demands the analysis of trial." Colvin v. City of Gardena, 11 Cal. App. 4th 1270, 1275 (1992) (emphasis added). If a court perceives possible admissibility solutions, should Sweetwater prevent the court from granting summary judgment?
Sweetwater unmistakably invites renewed examination of summary judgment focusing on potential admissibility at trial under a "reasonable possibility" standard. And while the summary judgment aspects of Sweetwater are dicta, counsel would do well to consider the source. After all, courts and opposing counsel will be examining Sweetwater too. Or at least, they ought to be.