Wilcox v. Superior Court

• Citation: 27 Cal.App.4th 809,33 Cal.Rptr.2d 446
• Decision Date: 16 August 1994
• Docket Number: No. B080282,B080282
• Court: California Court of Appeals
• Parties: Sondra WILCOX et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent; Ronald J. PETERS et al., Real Parties in Interest.

Page 446

33 Cal.Rptr.2d 446

27 Cal.App.4th 809

Sondra WILCOX et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent;

Ronald J. PETERS et al., Real Parties in Interest.

No. B080282.

Court of Appeal, Second District, Division 7, California.

Aug. 16, 1994.

As Modified on Denial of

Rehearing Sept. 15, 1994.

Review Denied Nov. 17, 1994.

[27 Cal.App.4th 813] Yvonne M. Renfrew, Santa Monica, for petitioners.

Hadsell & Stormer, Dan Stormer, Pasadena, Carol A. Klauschie, Los Angeles, and Dori E. Miles, Pasadena, for Real Parties in Interest.

No appearance for respondent.

JOHNSON, Associate Justice.

In her petition for writ of mandate Sondra Wilcox, a cross-defendant below, challenges the ruling of the trial court denying her motion to strike the cross-complaint against her for damages and injunctive relief based on restraint of trade and defamation. The motion to strike was based on California's anti-SLAPP (strategic lawsuits against public participation) suit statute (Code Civ.Proc., § 425.16). We issued an alternative writ of mandate and stayed proceedings in the trial court pending our decision on the merits. For the reasons set forth below we have determined the cross-complaint is subject to a motion to strike under the anti-SLAPP-suit statute and cross-complainants have failed to establish a probability they will prevail on their claims against petitioner.

FACTS AND PROCEEDINGS BELOW

This cause and its companion, Saunders v. Superior Court (1994), 27 Cal.App.4th 832, 33 Cal.Rptr.2d 438, arise out of the practice of "direct contracting" under which a certified shorthand reporter or association of reporters contracts with a major consumer of reporter services, such as an insurance company, for the exclusive right to report depositions taken by attorneys representing that consumer.

Plaintiffs in Saunders are certified shorthand reporters who brought suit against defendants, also certified shorthand reporters, alleging "direct contracting" as practiced by defendants constitutes an unfair business practice, intentional interference with plaintiffs' prospective economic advantages and interference with existing contracts. ¹ The reporter defendants in Saunders are members of an association known as the California Reporting Alliance, referred to by the parties as CRA or the Alliance. Also named as defendants are two insurance companies which entered into "direct contracting" agreements with the reporter defendants through CRA. Petitioner Wilcox is not a plaintiff in the Saunders suit but she did The reporter defendants in Saunders filed a cross-complaint against the plaintiffs in that action as well as other individuals including Wilcox and her reporting agency for defamation and conspiracy to unlawfully restrain trade through a boycott of defendants' reporting services. (We will refer to Wilcox and her agency together as "Wilcox" or "petitioner.")

make a financial contribution to support the litigation.

The first amended cross-complaint alleges Wilcox distributed a memorandum to various other shorthand reporters which stated, among other things: many shorthand reporting agencies were banding together "to 'permanently put the Alliance to rest once and for all' "; reporters were suing CRA and its members for extortion and racketeering; and reporters should tell attorneys representing insurance companies and their policyholders about this litigation so that the "threat" might be enough to make the insurers "back off" from entering into direct contracting agreements with CRA. The memorandum asked each reporter to contribute $100 to the lawsuit against CRA. The cross-complaint also alleges Wilcox told CRA members she would no longer refer them any work or network with them because they were affiliated with CRA.

Characterizing the cross-complaint as a SLAPP suit, ² Wilcox filed a motion to strike as to her and her reporting agency pursuant to Code of Civil Procedure section 425.16. ³ The trial court denied the motion on the ground "the responding parties have proffered sufficient evidence in opposition to the motion to establish the probability they will prevail on their claims."

Wilcox filed a petition for writ of mandate in this court seeking to overturn the trial court's denial of her motion to strike. As previously noted, we issued an alternative writ and stayed the proceedings below.

DISCUSSION

I. OVERVIEW OF STRATEGIC LAWSUITS AGAINST PUBLIC PARTICIPATION ("SLAPP" SUITS).

Litigation which has come to be known as SLAPP, is defined by the sociologists who coined the term as "civil lawsuits ... that are aimed at preventing citizens from exercising their political rights or punishing those who have done so." (Canan & Pring, Strategic Lawsuits Against Public Participation (1988) 35 Soc.Probs. 506.) The paradigm SLAPP is a suit filed by a large land developer against environmental activists or a neighborhood association intended to chill the defendants' continued political or legal opposition to the developers' plans. (See, e.g., Gordon v. Marrone (1992) 155 Misc.2d 726, 590 N.Y.S.2d 649, 651; Protect Our Mountain v. District Court (Col.1984) 677 P.2d 1361, 1364; Webb v. Fury (1981) 167 W.Va. 434, 282 S.E.2d 28; Note, Counterclaim and Countersuit Harassment of Private Environmental Plaintiffs: The Problem, Its Implications, and Proposed Solutions (1975) 74 Mich.L.Rev. 106, 112, 113.) SLAPPs, however, are by no means limited to environmental issues (see, e.g., Brownsville Golden Age Nursing Home, Inc. v. Wells (3d Cir.1988) 839 F.2d 155, 157 [suit by nursing home against private citizens who had complained to government officials about conditions in plaintiff's facility] ), nor are the defendants necessarily local organizations with limited resources. (See, e.g., Sierra Club v. Butz (N.D.Cal.1972) 349 F.Supp. 934.)

The favored causes of action in SLAPP suits are defamation, various business torts such as interference with prospective economic advantage, nuisance and intentional infliction of emotional distress. (Barker, Common-Law and Statutory Solutions to the Problem of SLAPPs (1993) 26 Loyola L.A.L.Rev. 395, 402-403.) Plaintiffs in these SLAPP suits are brought to obtain an economic advantage over the defendant, not to vindicate a legally cognizable right of the plaintiff. (Comment, Strategic Lawsuits Against Public Participation: An Analysis Of The Solutions (1991) 27 Cal.W.L.Rev. 399, 402; Barker, supra, 26 Loyola L.A.L.Rev. at p. 406.) Indeed, one of the common characteristics of a SLAPP suit is its lack of merit. (Barker, supra, 26 Loyola L.A.L.Rev. at pp. 396, 399.) But lack of merit is not of concern to the plaintiff because the plaintiff does not expect to succeed in the lawsuit, only to tie up the defendant's resources for a sufficient length of time to accomplish plaintiff's underlying objective. (Id. at p. 405.) As long as the defendant is forced to devote its time, energy and financial resources to combating the lawsuit its ability to combat the plaintiff in the political arena is substantially diminished. (Gordon v. Marrone, supra, 590 N.Y.S.2d at p. 656; Brecher, The Public Interest and Intimidation Suits: A New Approach (1988) 28 Santa Clara L.Rev. 105, 114; Comment, Strategic Lawsuits Against Public Participation: An Analysis Of The Solutions, supra, 27 Cal.Western L.Rev. at p. 404.) The SLAPP strategy also works even if the matter is already in litigation because the defendant/cross-complainant hopes to drive up the cost of litigation to the point where the plaintiff/cross-defendant will abandon its case or have less resources available to prosecute its action against the defendant/cross-complainant and to deter future litigation. (Note, Counterclaim and Countersuit Harassment of Private Environmental Plaintiffs: The Problem, Its Implications, and Proposed Solutions, supra, 74 Mich.L.Rev. at pp. 109-110.)

actions typically ask for damages which would be ruinous to the defendants. (See, e.g., Protect Our Mountain v. District Court, supra, 677 P.2d at p. 1364 [developer sought $10 million compensatory and $30 million punitive damages]; Barker, supra, 26 Loyola L.A.L.Rev. at p. 403 [estimating damage claims in SLAPPs average $9.1 million].)

Thus, while SLAPP suits "masquerade as ordinary lawsuits" the conceptual features which reveal them as SLAPPs are that they are generally meritless suits brought by large private interests to deter common citizens from exercising their political or legal rights or to punish them for doing so. (Pring, SLAPPs: Strategic Lawsuits Against Public Participation (1989) 7 Pace Envtl.L.Rev. 3, 5-6, 9.) ⁴ Because winning is not a SLAPP plaintiff's primary motivation, defendants' traditional safeguards against meritless actions, (suits for malicious prosecution and abuse of process, requests for sanctions) are inadequate to counter SLAPPs. Instead, the SLAPPer considers any damage or sanction award which the SLAPPee might eventually recover as merely a cost of doing business. (Barker, supra, 26 Loyola L.A.L.Rev. at pp. 406-407.) By the time a SLAPP victim can win a "SLAPP-back" suit years later the SLAPP plaintiff will probably already have accomplished its underlying objective. Furthermore, retaliation against the SLAPPer may be counter-productive because it ties up the SLAPPee's resources even longer than defending the SLAPP suit itself. (Id. at p. 432; Comment, Strategic Lawsuits Against Public Participation: An Analysis Of The Solutions, supra, 27 Cal.W.L.Rev. at p. 403.)

For these reasons, courts and legislatures have looked for procedural remedies which would allow prompt exposure and dismissal of SLAPP suits. (See, e.g., Protect Our Mountain v. District Court, supra, 677 P.2d at pp. 1368-1369 [motion to dismiss with heightened standard applied to plaintiff]; Webb v. Fury, supra, 282 S.E.2d 28, 47 (Neely, J. dissenting) [require plaintiff to plead more specifically where defendant's conduct is prima facie protected by First...