Appellate Law

Sixth District Court of Appeal offers the legislature some advice on amending the anti-SLAPP statute

By Greg May

If you just lost your appeal, handled by attorneys at a high-powered law firm, with fees approaching ? oh, heck, who knows, but three lawyers billing at a “BigLaw” firm have to run up a pretty hefty bill on a case potentially worth billions of dollars ? you might not be happy with language in the introduction of the opinion characterizing your appeal as “utterly without merit” and noting that the court declined imposing sanctions only because the court did “not wish to further delay the long-overdue trial of the merits of [the] action.”

That’s exactly how the court opened its opinion in Hewlett-Packard Co. v. Oracle Corp., case no. H039507 (6th Dist. Aug. 27, 2015). If you guessed that the case is an appeal from the denial of an anti-SLAPP motion (Code Civ. Proc., § 425.16), give yourself a gold star. (Or maybe not ? I mentioned anti-SLAPP in the title of this post, after all.)

The opinion is a good read if, like many, you believe that use of the anti-SLAPP statute has gotten out of hand. Indeed, the opinion cites another case’s reference to the “explosion of anti-SLAPP motions.” There’s simply too much in the opinion to try to summarize it here, so I’ll refer you to it for the nitty-gritty, and note just a few highlights.

On what does the Court of Appeal blame this explosion? The availability of immediate appeal when the motion is denied, that’s what:

A major reason for this explosion is that the statute rewards the filer of an unsuccessful anti-SLAPP motion with what one court has called a ?free time-out? from further litigation in the trial court.The statute does this by entitling the unsuccessful movant to immediately appeal the denial of such a motion?even one like Oracle?s, which wholly lacks merit, attacks only a small part of the plaintiff?s case, and is heard nearly two years into the lawsuit, and on the day before a scheduled trial. Such an appeal automatically stays all further trial proceedings on causes of action ?affected by the motion.? This means that however unsound an anti-SLAPP motion may be, it will typically stop the entire lawsuit dead in its tracks until an appellate court completes its review.

(Footnotes and citations omitted.)

The court argues that the anti-SLAPP “cure” is worse than the disease it was meant to address ? the filing of meritless suits designed to chill participation in the public arena. “It is as if a city had decided to cure an illness afflicting a few of its residents by lacing the water supply with a chemical that would indeed cure those sufferers, but would sicken a larger number of previously healthy citizens.”

The opinion closes with the court’s recommendation for amendment of the anti-SLAPP statute:

In this regard, we offer the suggestion that one simple fix might substantially reduce the motivation to abuse the anti-SLAPP procedure: Limit the right to  interlocutory appeal to denials, and allow them only where the motion (1) is filed within the allotted 60 days, and (2) would?if granted?dispose of the entire action. Where either of those conditions is lacking, the motion can rarely if ever achieve any real saving of time or money, and an appeal can only have the opposite effect. Such an amendment would limit invocation of the statute to cases where it may serve its stated purpose and greatly reduce its tactical utility in many if not most of the situations where it is now being most sorely abused.

As a “BigLaw” refugee, my favorite part of the opinion is the court’s lament that sanctions for frivolous appeals are not a very good deterrent against abuse of the anti-SLAPP statute:

But a prompt dismissal, even of a frivolous appeal, is not always feasible. In this case, HP?s motion to dismiss the appeal was supported by four volumes of exhibits, which Oracle answered with another five volumes, with the result that the motion essentially duplicated the appeal itself. Top-drawer legal representation, such as both parties have engaged here, can obscure the core frivolousness of an appeal beneath layers of artful obfuscation which only the most painstaking examination can peel away. And where the stakes are high enough?as they certainly are here, judging from the multi-billion-dollar figures put forward by HP?s experts on damages?the threat or even the certain prospect of sanctions may not alter the economic calculus that makes an anti-SLAPP motion, and ensuing appeal, so attractive.

(Emphasis added.) Sounds like Maybe Oracle got its money’s worth after all.

One last thing. Remember how it looked like Oracle had dodged the bullet of having to pay Hewlett-Packard’s attorney fees, since the Court of Appeal declined to impose sanctions? If I were Oracle, I wouldn’t quite count on it.

Full post as published by The California Blog of Appeal on August 27, 2015 (boomark / email).