Published Articles


Stifling Citizen Activism

By

Bob Peace
Alumni Distinguished Professor – NC State University
PO Box 8113
Raleigh, North Carolina 27695
Phone: 919-515-4434
Fax: 919-515-4446
e-mail: Bob_Peace@ncsu.edu



Introduction
Strategic Lawsuits Against Public Participation (SLAPPs) are lawsuits brought to court generally by companies and corporations against individual citizen activists and activist organizations that speak out against corporate activities (Pring, 1989). SLAPP lawsuits have, in rare circumstances, also been initiated by governmental units and by a university through its consultants. [i] A lawsuit qualifies as a SLAPP if the primary goal of the corporate plaintiff is to stifle or silence a person or a group’s queries or criticisms of corporate policy or behavior (Cosentino, 1991). SLAPP lawsuits are motivated to intimidate.
When a citizen takes a stand in protest against corporate activities in a community or on other community policy issues, the citizen does so with the knowledge that the activist view may well not be shared with neighbors or others in the community. Certainly the decision is made with some understanding that there may be a backlash or that there may be consequent circumstances that can be costly, both financially and emotionally. At the same time, citizen activism has been the cornerstone of social justice in American society (Abrams, 1989), and perhaps of most importance in the environmental protection movement. The protection of free expression from intimidation is an important social equity issue as well as a legal issue.
A corporation filing a SLAPP lawsuit in the United States takes the constitutionally right to free speech and to petition the government , available to citizen activists, out of the public forum, forces it into the courtroom, and changes the issues for debate. Once the lawsuit is filed against a citizen activist, the citizen as a defendant is forced to use time and resources defending the lawsuit. Consequently, public discussion of the underlying issue is basically finished (Pring & Canan, 1996). In the United States, the targets of SLAPP lawsuits, and the underlying issues, seem to span the spectrum of social justice advocacy. Defendants in SLAPP lawsuits include community spokespersons on issues that include education, protection of retirees’ pensions, fair wages, a safe workplace and the environment. The plaintiffs in these suits are often land developers and a study found that the Sierra Club was the nations leading SLAPP target (Mowrer, 1998).
Tax law favors corporations that file SLAPP suits and creates an inequity. A developer that sues a neighborhood activist or activist group can deduct the cost of the lawsuit for income tax purposes while the activist, usually an individual or a non-profit organization, cannot. Even if the developer loses the lawsuit and pays damages to the activist the damages usually constitute a deductible cost of doing business. This amounts to a financial subsidy for SLAPP filers (Braun, 1999). In fact, there are instances of activists turning the tables and SLAPPing back at the corporation of developer, but the record shows that the corporation considers this merely a cost of doing business, having accomplished its original underlying purpose of silencing the activist.
The judicial process often bullies a person with limited financial resources into silence, and that is the motive for the lawsuit. Common problems reported by targets of SLAPP lawsuits include depression, broken marriages, bankruptcies, and other economic and psychological disruption (Brecher, 1988). A sample of comments made by defendants who were sued in SLAPP lawsuits include: “I won’t circulate another petition, and my husband wants me out of community issues.”; “I don’t want my name on anything”; “Supporters have disappeared into the woodwork”. (Pring & Canan, 1996).
SLAPPs have crossed the ocean, with highly publicized cases appearing in England, Australia, and Canada and in other countries around the world. Defending against SLAPPs may be more of a problem for defendants in countries other than the United States, particularly those that recognize the English concept of parliamentary primacy. This is in contrast with the United States where the courts have an equal footing with the legislative and executive branches and the courts zealously defend the Constitutionally protected 1st Amendment right to free speech. [ii]
A well-pleaded SLAPP complaint, reflecting technical skill and documentation is, at least in the preliminary stages of litigation, well protected against allegations that the suit is not justified (Stein, 1989). So the corporate plaintiff in the U.S. must, at the outset, file documents with the court that make a reasonable case for relief. Consequently, the professional skills of lawyers and accountants are required. The issue for the plaintiffs in SLAPP lawsuits is always money, and when money is the issue we find focused legal and financial professionals.
Identifying a SLAPP
A study of 228 cases found to be SLAPPs found four general motivations for their filing (Canan, 1989). The motives are:
(1) (1) an intent to retaliate for successful opposition on an issue of public interest;
(2) (2) the attempt to prevent expected future, competent opposition on subsequent public policy issues;
(3) (3) the intent to intimidate and generally, to send a message that opposition will be punished;
(4) (4) a view of litigation and the use of the court system as simply another tool in a strategy to win a political and/or economic battle.
The corporate plaintiff filing the lawsuit is vested in the judicial process as opposed to a judicial verdict or resolution based on the merits of the litigation (Mowrer, 1998). The SLAPP process has an average duration of 40 months (Lowe, 1996), and most SLAPP filers lose if and when a case comes to judgment (McBride,1993). “Needless to say, an ultimate disposition in favor of the target often amounts to a Pyrrhic victory”. [iii] Although federal legislation exists to discourage SLAPP lawsuit and a number of states have passed specific legislation to protect the public from SLAPPs the courts are generally reluctant to silence free expression on the part of either participant in a SLAPP circumstance. [iv]
Frivolous or meritless lawsuits are not legal court actions. The target of such a lawsuit can bring a counter-suit for malicious prosecution or abuse of process. In addition, federal and state statutes exist that are intended to sanction those that bring unjustified or frivolous lawsuits to court. State legislation is intended to stop a SLAPP early, if a determination can be made that the suit is meritless or without justification. As a result, a significant application of legal financial, and administrative expertise is required in the preparation and filing of a SLAPP lawsuit by a corporate plaintiff. This means generally that the pleadings, the plaintiff corporation’s complaint, contain a request for money damages together with adequate justification in order for the court to consider silencing the out of court voice of the citizen activist being sued. It would appear that at this early stage of a lawsuit an accounting firm’s expertise would lend valuable support to a corporate client’s evidence and pleadings.
Another SLAPP tactic may not involve a lawsuit and the courts at all, but rather the taxing authority. In Gordon v. Marrone, 590 NYS 2d 649, 647 NE 2d 453, a developer brought the proceeding against a local tax assessor to contest an exemption from property taxes granted by the town of North Castle to the Nature Conservatory, an environmental organization. In a more recent example, the Kaktovik Inupiat Corporation, a supporter of Alaskan oil drilling, filed a complaint with the Internal Revenue Service (IRS) asking the IRS to investigate the tax exempt status of the Artic National Wildlife Refuge (ANWR). The complaint was filed to stifle ANWR’s grassroots and congressional lobbying activities against Alaskan oil operations (Sarasohn, 2001).
It is inevitable that lawyers and accountants have a substantial role in litigation of this nature and also inevitable that the most seasoned, experienced, and resource heavy of the professional advocates end up on the side where the money is. In the United States, expert advice columns in professional periodicals offer advice to lawyers on methods and procedures in bringing a SLAPP laws suit (Moneer, 2000).
It follows that accountants and other professionals called upon for expert advice and testimony in these cases understand their societal implications as well as the financial aspects. There are two sides to every lawsuit and some merit on both sides in most circumstances, but it would seem the public activist side could use more advice and guidance than the professionally insulated and wealthier corporate plaintiffs that generally initiate SLAPP lawsuits.


The global reach of SLAPPs
Sovereign states remain the creators of international environmental law but do so in a manner that is influenced, enabled, and empowered by private and non-governmental organizations. Non-governmental individuals and entities have become participant observers and major actors in international environmental law (Raustala, 1997). With non-governmental entities influencing international environmental policy, it seems natural that SLAPPs would expand globally with the global economy.
SLAPPs have found their way to the legal systems of a number of countries including Australia, England, Canada, South Korea, Singapore, Pakistan, France, and New Zealand (Canan, 1996). Some of the cases have gained international notoriety.
SLAPP suit are often premised on libel, with the corporate plaintiff alleging that the statements or publication by the citizen activist are false and injurious to the company’s reputation and consequent business interests. Freedom of expression and freedom to petition have always enjoyed a preferred constitutional status in the United States, and American libel law has placed the burden of proving truth or falsity of the defendant’s statement on the plaintiff who initiates the lawsuit.
SLAPP suits in the United States are usually one of two categories. SLAPPs occur in one category when an individual or an organization petitioning the government is sued by a business interest affected by the subject matter of the petition. SLAPPs occur in a second category when an individual or an organization is sued by a business interest for libel, for making untrue comments regarding the business interest. Speech that is a petition to the government, political speech, is given the greatest protection by the United States government. Two U.S. Supreme Court cases, Eastern Railroad Presidents’ Conference v. Noerr Motor Transport, 365 U.S. 127 (1961) and United Mine Workers v. Pennington, 381 U.S. 657 (1965), created the so-called Noerr-Pennington doctrine that the lower courts have understood to establish an absolute, constitutional privilege against tort claims for bona fide government petitioning activities.
Basically, the Noerr-Pennigton doctrine provides that the activities of the defendant activist must be found to be illegal for the plaintiff to prevail and that the motives of the activist defendant are not at issue. This blunts the thrust of the plaintiff corporatopn forcing it to do generally what it cannot do, and that is, prove that the activist’s behavior is illegal or tortuous without using evidence of bad motive.
With the constitutional protection offered by the Noerr-Pennington doctrine, the activist defendant would appear to have a good defensive position if the proceeding ever reaches the point where the doctrine could be asserted. It rarely reaches that point, however, since the whole point of the plaintiff’s lawsuit is not to win a case in court but rather to intimidate the defendant. Intimidation occurs as the defendant’s time and money are devoted to the defense while at the same time, the debate is changed from environmental or societal issues to the economic loss incurred by the plaintiff attributed to the defendant’s activism.
In addition, U.S. libel law is very liberal in protecting individual speech, with the burden of proving a statement to be false resting with the plaintiff initiating the lawsuit. U.S. libel law is also protective of a free press and media, in particular regarding so-called public figures, politicians, celebrities and the like. In the case of New York Times Co. v. Sullivan, 376 U.S. 254 (1964), the U.S. Supreme Court set a constitutional standard in a libel case brought by a public figure (the Montgomery, Alabama police commissioner in a pro-civil rights advertisement). The Court held that public officials can only be defamed in their official capacity if the offending statement was made with actual malice and with knowledge that it was false. The Court also provided that the plaintiff must prove actual malice with convincing clarity. The overriding rationale for the decision was in recognition of the potential for a more restrictive interpretation of libel to have a chilling effect on public speech, “the pall of fear and timidity imposed on those who would give voice to public criticism”.
England
In England the burden of proof is reversed in a libel lawsuit and the defendant in a libel action has the burden of proving the truthfulness of what was said or published. Consequently, England’s libel law is considered plaintiff-friendly, and potentially SLAPP friendly, and multi-national corporations have been known to bring libel suits in England to take advantage of the libel friendly judicial atmosphere. England’s libel laws are also seen as a tool for the privileged, used to silence criticism despite the public interest at issue (Wells, 1998).
A classic SLAPP lawsuit in England pitted McDonald’s as corporate plaintiff against two activist members of London Greenpeace (not associated with Geenpeace International). The suit was based on an 8-page pamphlet the activists were distributing at McDonald’s restaurants criticizing the company’s marketing methods toward children, cruelty to animals, deforestation and other environmental abuses, and the pay and treatment of its workers (Underhill, 1997). McDonald’s named several London Greenpeace members as defendants and all but two settled early in the proceedings. The two who went forward and defended themselves in the court proceedings did so without the benefit of counsel while McDonald’s retained some of the most expensive and well trained lawyers in England (Hilborne, 1997).
The lawsuit, the longest in duration in English history at that time, lasted for three years (Underhill, 1997) and concluded with an ironic resolution. McDonald’s, as plaintiff, won the case, but the defendants were without resources to pay any damages. Also, although McDonald’s proved their point in the court victory, they lost the public relations war, and were presented in the international press as a Goliath spending $16 million to nail two down and out Davids who represented themselves in court.
The legal resolution notwithstanding, this was a classic SLAPP exercise with the corporate plaintiff aware that it had more to gain by silencing public discourse on the particulars written in the pamphlet. They attempted this by moving the discussion to the court where the circumstances were stacked in their favor and they could shift the debate from one of corporate environmental and social abuse to one of libel and lost profit.
The British Petroleum Oil Company (BP) sued Greenpeace International in a subsequent SLAPP lawsuit in England. Greenpeace was involved in public efforts to stop BP’s oil exploration activity in the North Atlantic Foinaven oil fields. BP SLAPPed Greenpeace with a lawsuit. BP sought 1.4 million pounds in damages and placed several Greenpeace associates in danger of personal bankruptcy (Lean, 1997).
In the end the suit was settled before trial. Greenpeace agreed to stay out of Foinaven and BP backed away from its demand that Greenpeace not protest other BP operations. Despite this seemingly reasonable accommodation by the parties to the BP lawsuit the initial response by BP to initiate a lawsuit is more evidence that British corporations see SLAPP’s as a business option when they are exposed to unwanted public criticism.
Canada
SLAPPs in Canada have been initiated to curtail protest activity and boycotts related to multinational corporate logging operations on native and ancestral lands and related to the environmental issue of logging old growth forests (Wells, 1998). As with comparable lawsuits in the U.S. and in England, the Canadian litigation appears motivated to the purpose of removing contentious environmental and social issues from public discourse and defining a single issue, one of profits, in the courtroom.
In 1988, the Alberta government gave a Japanese multinational corporation called Daishowa the right to build a pulpwood plant in the heart of territory claimed by the Lubicon Lake Indian Nation as ancestral land. An activist group grew up in support of the Lubicon, Friends of the Lubicon, and started a secondary boycott of Daishowa paper products. The boycott was apparently successful in persuading 47 companies in Canada from using packaging products from Daishowa.
Daishowa went to court for an injunction against the boycott and in a separate lawsuit, asking for $812 million in damages. This was a classic SLAPP lawsuit and one of the largest SLAPP damages requests in Canada. Daishowa, unwilling to confront the Friends of Lubicon publicly, moved the debate to court with a cause of action based on interference with profits (Nelson, 1996).
Another significant SLAPP lawsuit was brought by INTEFOR, a British Columbia logging corporation that conducts logging in territories claimed by native inhabitants. An environmental activist group called Forest Action Network was organized to disrupt the corporations operations. Forest Action Network activists blocked roads, boarded log barges and suspended themselves above rivers used by the corporation, a more aggressive approach than the secondary boycott used by the Friends of Lubicon. The method of protest employed by the Forest Action Network and the boycott used by Friends of Lubicon both represent a kind of speech or political expression. The Forest Action Network was sued as were individual members of the group. Several of the individual members were unable to travel a thousand kilometers to Vancouver and were subject to default judgments of up to $12,000.
Australia
SLAPPs have developed as an issue in Australia (Bender, 1995). In Binalong PTY LTD v. Council of South Australia, Inc., Fed No. 210/94 (S. Aust. April 19, 1994), local residents and environmental activists opposed the construction of a bridge. The purpose of the bridge was to increase tourist traffic to the area and the environmentalists objected to the potential for environmental disruption and infringement on Aboriginal heritage sites. When construction started, protesters gathered at the site, disrupted the work, and spoke with the media. In addition, the protesters lodged complaints with the bank that was to finance the project.
The construction company sued each of the groups involved in the protest activities, including community groups, labor unions, and local and national environmental groups. They also asked for an injunction on the protest activities. The suits asking for money damages alleged interference with business, inducement to breach contract, and interference with performance of a contract. In this instance, the court recognized that the purpose of the plaintiff was to silence the defendant’s public criticism and the court did not allow this to happen.
A public response to SLAPPs in the United States
In the United States, the federal government and various state governments have introduced legislation to curtail SLAPP lawsuits. There has also been a judicial response to the problem in favor of defendant targets. Some of these initiatives are reasonably effective but they all encounter the balancing dilemma that occurs when two competing sets of speech or expressive behavior are at issue.
At the federal level, Federal Rules of Civil Procedure 12(b)(6) grants the defendant a motion to dismiss a lawsuit that fails to adequately state a claim upon which relief can be granted . If the defendant target can obtain an early or pre-trial dismissal the lawsuit doesn’t eat the defendant’s time and resources. Federal Rules of Civil Procedure 11 provides sanctions to be assessed against attorneys who bring a suit for an improper purpose.
Federal rules 11 and 12 are not terribly effective against SLAPPs since judges are loathe to stop a suit at an early stage, before all the relevant information is before the court. In addition, SLAPPs can be presented as ordinary tort lawsuits for interference with a contract or libel and the plaintiff’s attorney may feel comfortable fending off any sanctions related to an improper lawsuit.
Several states have introduced legislation in response to SLAPPs. These laws generally define the elements of a SLAPP, identify when the target may be entitled to damages against the filer, and set up procedures for an early hearing and dismissal if the suit is identified as a SLAPP. Among other provisions, states may require that the filer be required to be more forthcoming in detail early in the pleadings. Then a preliminary hearing would be held to determine if there are enough facts available for the court to continue the lawsuit and to determine if the case is being brought in good faith. Again, this would presumably bring accountants into the game to prepare financial statements, financial projections and damage estimates for the pleadings.
States are also studying recommendations that the plaintiff corporation advance the costs of early discovery procedures to the defendant. These costs would be refundable in the event the plaintiff prevails on the merits of the case. Then if the case went to trial and the plaintiff loses he would pay full costs of the litigation to the defendant/target (Ericson-Siegel, L, 1992).
The key to defending against a SLAPP and the attendant intimidation is time. The best result for a target defendant is an early dismissal, before the defendant’s financial and emotional resources are sapped. Court interpretations in the United States are helpful here. The courts generally act in defense of the constitutional right to free speech and in their liberal judicial interpretation of the burden of proof in libel law.

An international response to SLAPPs
England, Australia, and Canada all lack a constitutional or other statutory right to free speech or free right to petition (Wells, 1998). This may be turning around to some extent in all three countries, but without these rights the target of a SLAPP doesn’t have the basis for a pretrial hearing to examine the merits of the plaintiffs complaint.
England is a signatory to The European Convention on Human Rights which specifically provides for a broad protection for free expression. This has forced English courts to reevaluate the rights to free speech and England’s Human Rights Act of 1998 incorporates the Convention’s human rights provisions (Leigh and Lustgartener, 1999). Article 10 of the Convention states that the right to free expression can only be constrained by restrictions that are prescribed by law and are necessary for a democratic society. This seems less an endorsement of free speech than the constitutional interpretations of the 1st amendment by U.S. Courts and an affirmation of the long held English political doctrine of parliamentary primacy. Article 10 does distinguish between private and public persons in a libel suit and sets a higher standard of proof when a politician sues for libel.
Lord Harry Woolf identified a number of problems with the English civil justice system that seem a litany of the problems and circumstances that have made SLAPPs a rational option for a corporate plaintiff acting to stifle public criticism (Woolf, 1997). Woolf describes the key problems facing civil justice in England as cost, delay, and complexity. He finds that costs are excessive, disproportionate, and unpredictable and delay frequently unreasonable.
Woolf opines that excessive costs deter people from making or defending claims and for individual litigants, the unaffordable cost of litigation constitutes a denial of access to justice. When large corporate litigants are involved (the most common SLAPP plaintiffs) Woolf finds that costs fall ultimately on customers and shareholders, so that “deep pocket” corporate plaintiffs who are able to pass costs to their customers impose excessive costs on their opponents and consume the courts’ resources (Woolf, 1997).
One bright spot for SLAPP defendants in England is a procedural change adopted in 1994 in an effort to reform libel law. Changes to the Rules of the Supreme Court allow defendants to apply for a pre-trial “ruling on the meaning” hearing that allows the defendant to argue that his statements cannot have the meaning the plaintiff alleges in the pleadings. The judge can then dismiss the lawsuit if the judge agrees with the defendant (Milano, 1994).
The Canadian Charter of Rights and Freedoms protects the freedoms of thought, belief and expression. The Canadian Supreme Court has interpreted this to mean a variety of forms of speech (Tollefson, 1994). At the same time, free speech under the Charter is only protected from government intrusion and not speech among private parties that may have a public consequence.
Also, most existing Canadian decision making and standard setting on environmental matters is a discretionary matter for legislative and executive bodies. This does allow for a limited public participation consultancy during decision-making processes but otherwise there is very little effective recourse for an affected citizen in an environmental issue (Hughes and Iyalomhe, 1999).
Australia does not have a specific constitutional guarantee of free speech or a right to petition the government (Rich, 1995). Several Australian cases have, however, established an implied right to free speech. In Stephens v. Western Australia Newspapers, 182 C.L.R. 211 (1994), the court provided an American Constitutional defense to a libel lawsuit by a politician. That decision is limited and applies to political discourse, so that SLAPP defendants would have to assert the political nature of their critical statements in order to evoke the constitutional protection of communication. The protections, if available, would include a pre-trial hearing, one of the best defenses in a SLAPP lawsuit.
One Australian commentator on Australian civil rights states that the civil right to free speech is something to be decided by an elected parliament rather than an un-elected judiciary (Meagher, 1998). Meagher points to the experience of the United States where the constitutional right to free speech is exquisitely difficult to define with precision and productive of seemingly endless litigation.

Summary
SLAPPs in the United States are a threat to free expression and free speech on environmental issues and other matters of public concern. In seems natural that business professionals and accountants in particular would be involved in the preparation of lawsuits that feature corporate interests, since corporations are the plaintiffs most often heard from. That is where the money is. The SLAPP concept seems to have a global presence and accountants and other professional would do well to understand the nature of these lawsuits and their effects on free speech and citizen participation in matters of vital public concern.

Endnotes

[i] See Dixon v. Superior Court, 36 Cal. Reptr. 2d 687 (1994). In this case an anthropology professor wrote letters to governmental officials protesting Cal State University’s plans to build apartments over an ancient Indian village, protesting lack of compliance with the state’s Environmental Quality Act. The University’s consulting firm sued the professor for interference with a contractual relationship, libel, slander and trade libel.

[ii] See U.S. Constitution, Amendment I “Congress shall make no law…abridging the freedom of speech”.

[iii] See Gordon v, Marrone, 590 N.Y.S. 2d 649, 656 (1992) in which the court also recognized, “This case, like other SLAPPs, attempts to turn the petition clause on its head by using the right to petition to indirectly punish the prior exercise of the right to petition by others.”

[iv] Federal Rules of Civil Procedure Rule 11 provides sanctions against willful abuse of the courts and include deterrent provisions including a specific review of the merits of a suit that appears SLAPP motivated and a shifting of burdens of proof on to the filer as well as a shifting of fees. At least nine states have passed legislation allowing defendants to file special motions to strike SLAPPs on the basis of the target citizen’s first amendment petition guarantees.

References

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