Sued into silence

From the Spring 2001 issue of The News Media & The Law, page 18.

By Dan Bischof

When Lorrell Long got the notice that she had been sued for defamation over statements she made on a local ballot issue, she had one thought: “What kind of deal are we going to have to make with him to keep from having him take the shirts off our backs?”

“It’s kind of like a gut punch. You know you’re right but you’re overpowered at that point,” Long said. “You have an initial paranoia. You think about all of your assets: the little spot of land and the few little things you have.”

Long was saved by the work of pro bono counsel and a California law called an “anti-SLAPP” law that protects people, as well as publications, who make public statements about public issues.

“When (our attorney) told me this would be our defense and I researched the law, I said ‘Oh, thank God,'” she said. “I really don’t know how people could have been as bold as they were in any kind of public arena without it.”

SLAPP is an acronym for “strategic lawsuit (or litigation) against public participation.” A SLAPP lawsuit is a civil complaint or counterclaim filed against non-government individuals or organizations because of their communications to government on a substantive issue of some public interest or concern. Some states have enacted anti-SLAPP statutes to protect people from lawsuits brought primarily to chill the valid exercise of free speech, particularly when the speech is about a matter of public concern, such as circulating petitions, reporting official misconduct and lobbying for reform legislation.

Anti-SLAPP laws have also benefited publications, including Mother Jones, the San Francisco Chronicle and even community newsletters. In August 1995, a California appellate court ruled that the anti-SLAPP law applied not only to individuals, but to anyone, including newspapers, acting “in furtherance of [its] right of … free speech … in connection with a public issue.” In October 1997, a trial judge dismissed a libel lawsuit brought against Mother Jones by a political consultant. In December 2000, a California appellate court upheld the dismissal of a libel suit brought against a homeowners’ association over statements made in the association newsletter.

Anti-SLAPP laws exist in 17 states and are growing in number. In many cases, the laws face opposition from groups that benefit from silencing public speech: businesses, developers and trial lawyers. But the birthplace of modern anti-SLAPP statutes is California, and perhaps no place has felt the effect of the California law more than Loomis, a small agricultural town 25 miles outside Sacramento.

David Rosenaur acquired 64 acres of land in Loomis in 1984 when his company, Export International, became a partner in a company called Loomis Acres. A statement of partnership for Loomis Acres filed with Placer County in January 1986 identified the partners as Rosenaur, Export, Herbert Kern and Western Dominion Corporation. The statement did not note that Kern and Western had sold out almost entirely to Export the previous month.

Since he first acquired an interest in the property, Rosenaur tried to change its zoning status from agricultural to commercial so he could build a shopping center. The project was called “Turtle Island.” After a failed attempt to convince the town zoning board to make the change, Rosenaur had an initiative put on the local ballot in 1998.

Long and former Loomis Mayor Walt Scherer opposed the zoning change. Long said she fought the initiative for two reasons. First, she said it ran contrary to town policy directing growth to the center of town, not the outskirts where the Loomis Acres property sat.

“Number two, I think the principle of zoning by initiative is extremely bad,” Long said. “We really looked at this initiative as a stalking horse for developers to see if they could get by initiative what they couldn’t get from local government, and that would be a very bad precedent.”

Long pointed out that developers and “high-powered consultants” lobbied and spent money to get the initiative passed.

In an effort to find out more about the property, Long searched through public records and found the Loomis Acres partnership statement. She also discovered that Western Dominion was owned by two Los Angeles County businessmen and that Export had two Rancho Cordova officers. Long, Scherer and others drafted a flyer asking voters to oppose the initiative and proclaiming that “Turtle Island is owned by a partnership of speculators based in Los Angeles.”

The initiative was defeated, and Rosenaur then sued Long, Scherer and the committee which oversaw the opposition to the initiative for defamation. But to prove his case, Rosenaur, a public figure, would have to demonstrate actual malice, proof that the committee made the statements knowing they were false or in reckless disregard of the truth.

Long argued that she relied on the public records that reflected Los Angeles County ownership in the partnership. The defendants pointed out that they had seen nothing before the election to make them think that Rosenaur was the sole owner of the property.

Following a hearing, the trial court granted the defendants’ motion to strike the complaint under California’s anti-SLAPP statute. On March 6, the California Court of Appeal (3rd Dist.) agreed and upheld the dismissal of the case, underscoring a defendant’s ability to rely on public documents when speaking on matters of public concern. The appellate court also affirmed the award of attorneys fees to Long’s attorney under the anti-SLAPP statute.

“We’re back to the way it should be,” which is local government making the decision about the zoning of the property, Long said.

The term “SLAPP” was first coined by George Pring and Penelope Canan, University of Denver professors of law and sociology, respectively, who led the first in-depth research project to study this type of action in the late 1980s.

The study revealed that the objects of speech-stifling suits generally were “not extremists or professional activists but instead are typical, middle-class, even middle-of-the-road Americans, and frequently first-time activists.”

SLAPP suits punish not only the litigants, but society at large, they contended. “Our overloaded courts are further burdened. Numerous government programs, which rely on citizen input, information, and involvement, are undercut. Most troublesome, SLAPPs actually impede solution of the public problem,” Pring and Canan wrote in a 1992 law review article.

“The object of a (SLAPP) plaintiff’s lawsuit was often not to prevail at trial but to quell criticism by instilling a fear in its targets of large recoveries and legal costs,” Los Angeles attorney Dennis Seider wrote in a law review article in November 2000. “Commercial plaintiffs — well positioned to absorb significant litigation costs — posed an especially serious threat to small groups or lone critics sued for speaking against certain practices of the commercial plaintiffs.”

The problem was so rampant, Pring and Canan found in 1992, that “(t)here is no lack of victims. In the last two decades, thousands have been sued into silence.”

The California Legislature saw the trend and responded. In 1992 it found that “there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.”

In an effort “to encourage continued participation in matters of public significance,” the legislature passed a law, which provided broad authority to strike a complaint based on an act of free speech “in connection with a public issue” unless the court determined the plaintiff had established, by credible evidence, “a probability (the plaintiff) will prevail on the claim.”

“The statute gives a defendant the power to strike a meritless lawsuit before it inflicts its greatest damage through backbreaking discovery, months of harassing depositions, sometimes years of uncertainty,” said James Houpt, who represented Long in her suit.

Moreover, under the California anti-SLAPP statute, attorneys fees are granted to a defendant who prevails on a special motion to strike the plaintiff’s lawsuit.

“It really does empower the individual to step up to the microphone and speak their mind, which is what the process is supposed to be about,” said Scherer, a co-defendant with Long.

New York also passed an anti-SLAPP statute in 1992. Other states followed and now 17 states have anti-SLAPP legislation.

Pennsylvania Gov. Tom Ridge signed Pa. H.B. 393 into law last December. That law provides a remedy against lawsuits “brought primarily to chill the valid exercise by citizens of their constitutional right to freedom of speech and to petition the government for the redress of grievances.” Under the new statute, a person who successfully defends against a SLAPP lawsuit can be awarded reasonable attorneys fees and the costs of litigation.

Florida also added an anti-SLAPP bill last year.

Four states have introduced anti-SLAPP bills this legislative term: Colorado, New Mexico, Oregon and Arkansas.

The Colorado bill, H.B. 01-1150, was introduced in January by Rep. Bill Sinclair (R-El Paso) and co-sponsored by Sen. E. Jim Dyer (D-Durango). The bill provides that a person subject to a SLAPP suit could file a motion to dismiss the suit, have discovery suspended, and shift the burden of proof to the SLAPP filer. The bill also authorizes a person damaged or injured to seek relief for actual or compensatory damages, punitive damages, attorneys fees and costs.

The New Mexico bill, H.B. 241, was introduced by Rep. Patsy Trujillo Knauer (D-Santa Fe). The bill, which was significantly pared back in committee, now provides that legal actions taken against persons for speech to a governmental entity is subject to a special motion to dismiss. The court should hear such a motion on an expedited basis. If the court grants the motion to dismiss, “the court shall award reasonable attorney fees and costs incurred by the moving party in defending the action.”

Oregon has dueling bills: S.B. 497 and H.B. 2460. The house bill was printed at the request of Rep. Kurt Schrader (D-Salem). Schrader attempted to pass an anti-SLAPP statute in 1999; that bill passed the House but died in the Senate.

In March, Rep. Jan Judy (D-Fayetteville) introduced H.B. 2327 in Arkansas, but then withdrew the bill one month later after realizing she did not have enough votes to get it out of committee. Judy said she plans to hold public hearings on the issue and will re-introduce the bill in the next legislative term. She said the anti-SLAPP bill faced stiff opposition from business, developer and trial lawyer lobbies.

Because the laws are relatively new, courts are now grappling with the meaning of the statutes’ provisions. California is again leading the way, especially in the area of attorneys fees.

Two California courts recently underscored a defendant’s rights to attorneys fees in SLAPP lawsuits. In Ketchum v. Moses, the California Supreme Court ruled on Feb. 26 that a successful defendant was entitled to attorneys fees under the “lodestar” method, where the court determines the local prevailing rate for attorneys and multiplies it by the number of hours worked on the case. That figure is then adjusted according to several factors, such as the novelty of the legal issues, the skill required to complete the case, and the contingent nature of the fee award.

In Rosenaur v. Scherer, Lorell Long’s case, the California Court of Appeals in Sacramento (3rd Dist.) ruled on March 6 that attorneys fees were warranted even where defendant’s counsel worked pro bono. The appellate court was the first appellate court in the state to determine whether the anti-SLAPP’s provision that attorney’s fees and costs may be “recovered” included situations where the defendant himself was not liable for the fees and costs.

The Rosenaur court construed the statute as containing no distinction between recovery of fees for which the defendant himself was liable and recovery of fees paid for on behalf of the defendant. The court also reasoned that because an attorney was an agent of his client, the statute could be applied to situations where the attorney had accrued costs or fees on behalf of the client.

Attorney Houpt said the decision will underscore a defendant’s right to an attorney who is knowledgeable about the First Amendment.

“Compensating pro bono counsel helps the anti-SLAPP statute to achieve its goals: to reduce the number of bullying lawsuits that help a wealthy plaintiff accomplish selfish goals regardless of the damage to the First Amendment,” he said.