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Two branches of California government, wrestling with a complex series of legal and political issues, have made sense of the state’s pioneering anti-SLAPP law and made major steps to ensure that it is used by its intended beneficiaries and not abused in ways not intended by the law’s framers. If the third branch — in the person of Gov. Gray Davis — signs legislation to amend the law this month, the law can continue to function as the major free-speech bulwark it was intended to be. The unusual confluence of events in the last week of August — three major California Supreme Court decisions on Aug. 29, 2002, and a major overhaul of the anti-SLAPP law in the Legislature on Aug. 31 — was prompted by a frenzy of activity in the courts and, subsequently, the Legislature in the past year. The anti-SLAPP statute (targeting so-called Strategic Lawsuits Against Public Participation) has been on the books for 10 years now, but in the past few years it has been used routinely in almost every variety of commercial case as a potent litigation weapon. In many cases, powerful, non-media corporations have used the statute’s anti-SLAPP motion against consumer lawsuits as a strategic litigation weapon very much like the SLAPP suits the law was designed to combat. It was against that backdrop that, in the very different milieus of the state Supreme Court and the state Legislature, two branches of government dealt with how to preserve the statute’s core use in cases involving the exercise of free speech and petition rights while at the same time putting some limits on its use in cases far removed from the quintessential SLAPP, an intimidation lawsuit brought by a powerful corporation suing a citizen activist for speaking out against a development project. SUPREME COURT’S TRIO OF CASES The Supreme Court spoke first with three decisions on Aug. 29 arising from three very different factual circumstances, only one of which resembled a typical SLAPP suit. The three cases all involved the core issue of whether someone making an anti-SLAPP motion — which aims at the early dismissal of a case and which can involve an award of attorneys fees to the party making the motion — must first show that the plaintiff had an “intent to chill” the exercise of free speech. A secondary issue was whether the party making an anti-SLAPP motion must show that the plaintiff’s action had a “chilling effect” on speech or petition rights. The Supreme Court had little difficulty rejecting both requirements. First, the court — which commendably sees its role as following the plain language of laws — followed the plain language of the anti-SLAPP statute. The court unanimously observed that the anti-SLAPP law “nowhere states that, in order to prevail on an anti-SLAPP motion, a defendant must demonstrate that the plaintiff brought the cause of action complained of with the intent of chilling the defendant’s exercise of speech or petition rights.” Nothing in the statute requires the court to figure out the plaintiff’s subjective motivations before determining whether the statute applies, the court found. Lawsuits can chill speech even if they aren’t intended to do so, the court observed. The court’s rejection of an “intent to chill” requirement came in three cases with very different factual circumstances, and had three very different results in those cases. EQUILON: WRONG MESSAGE, WRONG MESSENGER In Equilon v. Consumer Cause, an organization called Consumer Cause had served Equilon, which operates Shell and Texaco gas stations, with notice to sue under Proposition 65, a California law regulating cancer-causing substances. Before Consumer Cause had filed a lawsuit, however, Equilon filed its own “declaratory relief” action. Consumer Cause filed an anti-SLAPP motion, claiming Equilon’s action arose from Consumer Cause’s petition rights. Both the trial court and Court of Appeal agreed, dismissing Equilon’s lawsuit and awarding attorneys fees against it. Equilon obtained review in the Supreme Court, arguing that the statute had become a monster and that the award of attorneys fees against Equilon was unconstitutional unless a court found that it acted with the intent to chill free speech. Some lower courts had adopted just such an “intent to chill” requirement. Equilon confronted two insurmountable problems, however: the message and the messenger. The message — someone making an anti-SLAPP motion should have to show that the plaintiff intended to chill free speech — has some surface appeal, but it is a message the Legislature didn’t send when it passed the law in 1992, and with reason. An “intent to chill” requirement would enmesh trial courts in thorny determinations of a litigant’s state of mind while determining whether the anti-SLAPP statute applied. Equilon was also the wrong messenger for the argument that an award of attorneys fees against SLAPP filers was unconstitutional. Equilon, the operator of dozens of Shell and Texaco stations, was hardly the poster boy of someone who couldn’t afford to pay its adversary’s attorneys fees. COTATI: THIS ISN’T A SLAPP The Supreme Court did look for ways to cabin the use of the anti-SLAPP statute in a case called City of Cotati v. Cashman. The city of Cotati had passed a law regulating rents charged by mobile home owners. The mobile home owners filed a constitutional challenge to the rent control ordinance in federal court. Cotati then filed its own state court declaratory relief action. The mobile home park owners then filed an anti-SLAPP motion in the state court case and the motion was granted. The Supreme Court found there was no “intent to chill” requirement. Second, the court made short shrift of the argument that an anti-SLAPP motion must demonstrate that the plaintiff’s action would have a “chilling effect,” reasoning, “judicial imposition of a chilling-effect proof requirement would contradict the anti-SLAPP statute’s plain language, undermine the Legislature’s expressed intentions and create anomalies. The statute contains no such requirement.” The court, however, did limit the statute’s reach by strictly interpreting the requirement that a person making an anti-SLAPP motion show the plaintiff’s action arises from speech or petitioning activity. Cotati’s action “arose” not from the park owners’ federal court lawsuit, but from the controversy over rent control, the court reasoned. Therefore, the anti-SLAPP statute didn’t apply. Any other result, the court concluded, would mean that any cross-action would be subject to the anti-SLAPP statute, an “absurd result” in the court’s view. The court’s ruling in the Cotati case was unanimous. In a third case, however, Navellier v. Sletten, the court was sharply split, 4-3, with the majority finding that the statute applied and a vociferous three-justice majority arguing that it didn’t. Justice Janice Rogers Brown, in a dissent in Navellier, argued, “Under the majority’s rule, suits are presumptively SLAPPs until the plaintiff affirmatively makes a requisite showing. This will deter parties with novel claims, burden parties with meritorious ones and prevent courts from hearing legal theories that warrant consideration. Frivolous filers will gain a new bargaining chip for settlement; a threatened motion to strike, even if unsuccessful, will cost meritorious litigants time and money.” LIMITING BUSINESS USE OF SLAPP While the Supreme Court was grappling with three cases involving the anti-SLAPP statute, California’s Legislature was working on changing the statute to limit its use by business and commercial speakers. The bill, which cleared the Legislature in the waning hours of its session on Aug. 31, had its genesis in the increasing use of the statute by big business in the past few years. As far back as 1994, one type of business — media companies — had used the statute with great frequency and little objection. After all, the statute protects free speech, and that’s the business in which newspapers, magazines and television stations are engaged. While the media may not have been the poster boys of the statute when it passed in 1992, their use of the statute to combat defamation suits was certainly consistent with its core purpose to protect free speech. Things changed in 2000 when drug manufacturer DuPont Merck used the statute against a consumer lawsuit challenging its marketing of the drug Coumadin. The DuPont case, along with an amendment to the statute allowing defendants to appeal from a denial of an anti-SLAPP motion, led to widespread use of the statute by Fortune 500 non-media companies against consumer lawsuits. The Consumer Attorneys of California turned to the Legislature this year, arguing that big business was perverting the statute by using it against consumers, exactly the opposite of what the framers of the law had in mind. Senate Bill 789 would curb use of the statute in class actions or “private attorney general” actions, as well as cases involving strictly commercial speech. The new limitations would not apply to the news media and motion picture industry, which could continue to use the statute. The heaviest opposition to the bill came from the insurance industry, which seems to think that low-balling its policyholders is the highest form of protected speech. At the same time the insurance industry was opposing amendments to the anti-SLAPP statute, it was sabotaging a Senate constitutional amendment that would have given constitutional status to the public’s right to know. The insurance industry apparently feels that consistency is the hobgoblin of small minds. Gov. Gray Davis has until Sept. 30 to act on the bill. His signature would go a long way to restoring the statute to its original use on behalf of free speech and petition rights by those challenged with intimidation lawsuits, and not as a weapon to be used routinely against consumer lawsuits. Karl Olson is a partner at Levy, Ram & Olson who wrote amicus curiae briefs for the California Newspaper Publishers Association and various members of CNPA in the three cases recently decided by the state Supreme Court. Olson is also counsel for The Recorder .

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