SLAPP Solutions Daily Journal Publications SLAPP Law applies to malicious-prosecution action

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Daily Journal - Sep 18, 2003

SLAPP Law Applies to Malicious-Prosecution Action

Focus Column

Litigation

By James J. Moneer

Enacted in 1992, the anti-SLAPP statute, Code of Civil Procedure Section 425.16, has been amended three times and interpreted by 124 published decisions, including seven from the California Supreme Court. At least five other decisions are pending review.
While the scope of Section 425.16 has expanded over the past 10 years, this trend may be reaching a plateau. Moreover, on Sept. 8, the governor signed SB515, which becomes effective Jan. 1, 2004. The law precludes application of Section 425.16 in certain consumer-rights and commercial-speech cases.
But the recent Supreme Court decision in Jarrow Formulas v. LaMarche, 2003 DJDAR 9295 (Cal. Aug. 18, 2003), demonstrates that application of the anti-SLAPP procedure remains broader than ever in the right-to-petition context.
The anti-SLAPP framework turns on a two-step analytical process. On an anti-SLAPP motion to strike, the defendant has the initial burden of making a prima facie case that the cause of action arises from an act in furtherance of the defendant's exercise of petition or public-issue speech rights. Section 425.16(b)(1), (e).
The defendant can meet this burden by showing that the cause of action is based on any one of the four categories of conduct described in subdivision (e), broadly construed. Equilon Enterprises LLP v. Consumer Cause Inc., 29 Cal.4th 53 (2002); see Dowling v. Zimmerman, 85 Cal.App.4th 1400 (4th Dist. 2001).

Once the defendant makes the required showing, the burden shifts to the plaintiff to establish a probability of prevailing on the merits; the plaintiff must present admissible evidence sufficient to raise a triable issue of fact on all essential elements of each claim subject to the motion. Dowling.
Lower courts have attempted to increase the defendant's initial burden of making a prima facie case in a variety of ways, such as imposing a separate public-issue pleading requirement onto subdivision (e)'s official-proceeding prong. In 1999, the Supreme Court rejected a public-issue pleading requirement for official-proceeding activity and adopted a broad, plain-language construction. Briggs v. Eden for Hope & Opportunity, 19 Cal.4th 1106 (1999).
More recently, lower courts have attempted to add public-policy exceptions to Section 425.16 by grafting concepts from the preamble (subdivision (a)), such as "valid exercise" or "lawsuits brought primarily to chill," onto the operative provisions of the statute (subdivisions (b)(1), (e)). See, e.g., Paul for Council v. Hanyecz, 85 Cal.App.4th 1356 (2nd Dist. 2001) (proof-of-validity requirement).
In a 2002 trilogy, the Supreme Court made eminently clear that the anti-SLAPP statute means exactly what it says. Equilon (rejecting intent-to-chill requirement); City of Cotati v. Cashman, 29 Cal.4th 69 (2002) (rejecting chilling-effect requirement); Navellier v. Sletten, 29 Cal.4th 82 (2002) (rejecting proof-of-validity requirement).
Navellier foreshadowed the result in Jarrow by adhering to a simple, plain-language construction of subdivision (e)(1). The Navellier cause of action essentially arose from the defendant's alleged fraud and breach of a settlement agreement not to sue.
Consistent with Chavez v. Mendoza, 94 Cal.App.4th 1083 (4th Dist. 2001) (the first Court of Appeal decision to hold that Section 425.16 covers malicious-prosecution actions), the Supreme Court in Navellier held that Section 425.16 covers any cause of action based on the alleged improper filing of a lawsuit. The court also held that the question of whether the filing of that suit was improper or invalid should be addressed on the merits in the second step of the SLAPP analysis.
The Navellier court held that, because the breach-of-contract claim was "based upon" the defendant's act of filing counterclaims in breach of a settlement-and-release agreement not to sue, it "arises from" the making of a written statement or writing "before ... a judicial proceeding" within the meaning of subdivisions (b)(1) and (e)(1).
The court also held that, because the fraud claim was based on the defendant's signing and execution of the settlement-and-release agreement with the alleged intent not to abide by its terms, it is based on a "writing made in connection with an issue under consideration or review by a ... judicial body" in the prior action, under the plain language of subdivision (e)(2).
Justice Janice Rogers Brown dissented based on public policy, claiming that the defendant's act of filing a lawsuit in violation of a settlement-and-release agreement was not a "valid" exercise of First Amendment petition rights. This reasoning is at odds with the majority opinion, which held that "no proof of validity requirement" exists.
In Jarrow, plaintiff Jarrow Formulas Inc. sued Sandra LaMarche for rescission and fraud involving the right to certain graphic-design artwork. Represented by attorney Mark Brutzkus, LaMarche cross-complained against Jarrow for slander of title and interference with economic advantage. After a bench trial on Jarrow's complaint, the court ruled in favor of LaMarche.
Jarrow, however, obtained summary judgment on, and dismissal of, the cross-complaint and sued LaMarche and Brutzkus for malicious prosecution, based on the filing of the cross-complaint.
LaMarche and Brutzkus filed a special motion to strike the cross-complaint, which the trial court denied. The Court of Appeal reversed, holding that the plain language of Section 425.16 covered malicious-prosecution actions. The Supreme Court affirmed this plain-language construction.
First, the Supreme Court held that, because a malicious-prosecution action is based on a defendant's act of filing a lawsuit in an underlying judicial proceeding, it "arises from" the defendant's acts in furtherance of the constitutional right of petition as defined in subdivision (e).
Second, the court held that attorneys who initiate and pursue the underlying lawsuit on behalf of their clients also are entitled to the protection of Section 425.16 when faced with a malicious-prosecution action based on the lawsuit.
The Jarrow parties agreed that Section 425.16, by its terms, applied to malicious-prosecution actions. The dispute turned on whether the Legislature intended this result and whether the court needed to draw a public-policy exception exempting malicious-prosecution actions from Section 425.16. The court drew such an exception in Silberg v. Anderson, 50 Cal.3d 205 (1990), exempting malicious-prosecution actions from the plain language of the litigation privilege in Civil Code Section 47(b).
The court reviewed its prior anti-SLAPP jurisprudence and the basic canons of statutory construction in concluding that "[t]he plain language of the statute establishes what was intended by the Legislature."
The court addressed the differences between the operation and function of Section 425.16 and the litigation privilege of Section 47(b). The court noted that the anti-SLAPP procedure is merely a procedural screening device for weeding out meritless suits at an early stage; its application does not, in itself, result in dismissal of a plaintiff's lawsuit. A malicious-prosecution plaintiff can defeat an anti-SLAPP motion by producing admissible evidence sufficient to raise a triable issue of fact.
In sharp contrast, the litigation privilege is an absolute defense that bars any cause of action falling within its parameters, no matter how much evidence the plaintiff produces. For this reason, the Silberg court reasoned that the malicious-prosecution tort would vanish from the face of state tort law completely unless it was exempted from the scope of the privilege.
Given the difference in the operation and function of the two laws, the Jarrow court found no need to carve out an exception for malicious-prosecution actions in the anti-SLAPP context. The court noted that "spurious malicious prosecution suits may, like others, chill the 'valid exercise of the constitutional rights of freedom of speech and petition for redress of grievances.'"
As to the probability-of-prevailing prong, the court noted that, even in cases in which the plaintiff can show that the underlying lawsuit was brought without probable cause, this does not, without more, establish the actor's malice in bringing the suit.
Moreover, probable cause may be present even where a suit lacks merit. The Jarrow court noted, citing Downey Venture v. LMI Ins. Co., 66 Cal.App.4th 478 (2nd Dist. 1998), that malicious-prosecution actions in which lack of probable cause is shown can be meritless where evidence of malice is lacking.

James J. Moneer is a San Diego lawyer who specializes in handling SLAPP cases for plaintiffs and defendants. He was amicus counsel in the Supreme Court for the SLAPP defendants in Jarrow, Equilon and Cotati. He represented the defendant in Dowling. He is a panelist for the Rutter Group's SLAPP seminars.