A City of Cotati lawsuit against mobile home park owners who challenged the city's rent control ordinance was not a strategic lawsuit against public participation (SLAPP), the state Supreme Court has ruled unanimously.
The city filed a validation lawsuit against Gene Cashman and other mobile home park owners in state court after the park owners sued the city in federal court over the rent control law. The park owners contended that the city's lawsuit was a SLAPP, and Sonoma County Superior Court Judge Laurence Sawyer agreed. But an appellate court overturned the decision, and the state Supreme Court upheld the appellate court's ruling.
The state high court ruled that an actual controversy — the legitimacy of a rent control ordinance — was the basis for the city's lawsuit in state court. The city's lawsuit did not arise from the park owners' federal lawsuit, so the city's lawsuit was not subject to the anti-SLAPP statute (Code of Civil Procedure § 425.16).
In 1998, the city adopted a mobile home rent stabilization ordinance to maintain the affordability of housing. Shortly thereafter, mobile home park owners sued the city in federal court, claiming the ordinance amounted to an uncompensated regulatory taking. The city then filed a lawsuit in state court seeking a declaration that the ordinance and the city's application of it to individual property owners were constitutional.
The park owners called the city's lawsuit a SLAPP — an illegal lawsuit that project proponents sometimes wield in hopes of shutting down their opponents. The city conceded it filed the lawsuit because it saw state court as a more favorable venue, and that it intended to ask the federal court to abstain while the other lawsuit proceeded. But the city also argued that a valid controversy existed for the state court to decide. Judge Sawyer sided with the park owners, saying the city's lawsuit arose from the property owners' exercising their right to petition the government.
The First District Court of Appeal reversed the decision and remanded the case back to the trial court in July 2001. The appellate panel ruled that Cotati's lawsuit sought to resolve the same constitutional issues that mobile home park owners had raised themselves. The court also held that Cotati's lawsuit served the public interest and did not result in additional expense or inconvenience for the park owners.
At the state Supreme Court, the definition of the term "arising from" became the turning point. In the two-part test for determining whether a lawsuit is a SLAPP, a court must first decide whether the lawsuit is one "arising from" protected activity, such as speaking freely. If the answer is yes, then the court must determine if the plaintiff has demonstrated a probability of winning the lawsuit. If the plaintiff cannot do so, the lawsuit is subject to the anti-SLAPP law and the court can strike the lawsuit.
The court held that "arising from" does not mean the same thing as "in response to."
"[T[he mere fact an action was filed after protected activity took place does not mean it arose from that activity," Justice Kathryn Mickle Werdegar wrote for the court.
"The anti-SLAPP statute cannot be read to mean that ‘any claim asserted in an action which arguably was filed in retaliation for the exercise of speech or petition rights falls under § 425.16, whether or not the claim is based on conduct in exercise of those rights,'" Werdegar continued, citing ComputerXpress, Inc., v. Jackson, (2001) 93 Cal.App.4th 993. To rule as the park owners urged "would in effect render all cross-actions potential SLAPPs," the court ruled.
"[T]he actual controversy giving rise to both actions — the fundamental basis of each request for declaratory relief — was the same underlying controversy respecting city's ordinance. City's cause of action therefore was not one arising from owners' federal suit," Werdegar wrote. Thus, the city's lawsuit was not subject to the anti-SLAPP law.
Whether or not the city filed its lawsuit as a tactical response to the park owners' suit was irrelevant under the anti-SLAPP statute, the court held. Park owner arguments that the city's lawsuit was an attempt to chill free speech were also irrelevant, Werdegar wrote. In fact, requiring the defendant of a lawsuit to prove that the action had a chilling effect would deprive the defendant of anti-SLAPP protection, she wrote.
Chief Justice Ronald George and Justices Joyce Kennard and Carlos Moreno concurred with Werdegar's opinion. Justices Janet Rogers Brown, Marvin Baxter and Ming Chin agreed with the portion of the opinion addressing the definition of "arising from" but called the rest of the opinion unnecessary.
The state's high court issued two other SLAPP rulings the same day the Cotati opinion came down. The common ruling in all three cases was that a defendant in an alleged SLAPP lawsuit did not have to prove subjective motive behind the lawsuit.
City of Cotati v. Cashman, No. S099999, 02 C.D.O.S. 7957, 2002 DJDAR 9950. Filed August 29, 2002.
For Cotati: Donald Lincoln, Endeman, Lincoln, Turek & Heater, (619) 544-0123.
For Cashman: R.S. Radford, Pacific Legal Foundation, (916) 362-2833.
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