Ludwig v. Superior Court

• Decision Date: 26 July 1995
• Docket Number: No. E015539,E015539
• Court: California Court of Appeals Court of Appeals
• Parties: , 23 Media L. Rep. 2313, 95 Cal. Daily Op. Serv. 5934, 95 Daily Journal D.A.R. 10,117 Glen LUDWIG, Petitioner, v. The SUPERIOR COURT of RIVERSIDE COUNTY, Respondent. CITY OF BARSTOW, et al., Real Parties in Interest.

Page 350

43 Cal.Rptr.2d 350

37 Cal.App.4th 8, 23 Media L. Rep. 2313,

95 Cal. Daily Op. Serv. 5934,

95 Daily Journal D.A.R. 10,117

Glen LUDWIG, Petitioner, v. The SUPERIOR COURT of RIVERSIDE COUNTY, Respondent CITY OF BARSTOW, et al., Real Parties in Interest.

No. E015539.

Court of Appeal, Fourth District, Division 2, California.

July 26, 1995.

Review Denied Nov. 22, 1995.

[37 Cal.App.4th 11] Brian J. Simpson, San Bernardino, Everett L. Skillman, and Clive J. Kemp of Cummings & Kemp, Santa Ana, for petitioner.

No appearance, for respondent.

Latham & Watkins, Dorn G. Bishop, Christopher Garrett, San Diego, Smith, Silbar, Duffy & Parker and Keith M. Parker, Irvine, for real parties in interest.

OPINION

RICHLI, Associate Justice.

Petitioner Glen Ludwig, defendant in the action below, seeks a writ of mandate to compel the trial court to grant his special motion to strike under Code of Civil Procedure section 425.16. ¹ We conclude that real party the City of Barstow ², plaintiff below, has failed to show a "probability" of success on the merits within the scope of the statute, and that the trial court therefore erred in denying Ludwig's motion. We will grant the relief prayed.

STATEMENT OF THE CASE

In a nutshell, petitioner Ludwig wishes, or has wished, to develop a discount mall in or near the Cities of Hesperia or Adelanto, and has taken at least preliminary steps to do so. Barstow, in turn, hoped to attract a discount mall of its own. Due to the geographic proximity of the locations, and their situation along the same transportation corridor, it would be economically advantageous for either mall not to face competition from the other. As a result, Ludwig, who apparently had the initial edge, was naturally concerned when the prospect of a competing mall in Barstow arose. ³ As a result, Ludwig took certain actions which became the subject of this litigation.

Barstow's first amended complaint sets forth causes of action for interference with contractual relations, interference with prospective economic advantage, and unfair competition. It sets forth Ludwig's supposed misdeeds in considerable detail, which we will summarize.

After a developer (Tanger Properties) had conditionally agreed to purchase property in Barstow for the development of a mall, one Clyde Sweet appeared at a public City Council meeting and opposed the Tanger project. Thomas Keating then filed a lawsuit challenging the project, which the complaint characterizes as "meritless." When Barstow attempted to take Ludwig's deposition in this action, Ludwig "sought to block the depositions" and subsequently failed to appear as allegedly promised. Ludwig was otherwise uncooperative with Barstow's efforts to ascertain whether he was "behind" the litigation.

Keating and Barstow then settled the litigation.

Wayne Hendrix then appeared at another public meeting and requested that additional hearings be held on the Tanger project.

Sheree Krier then filed an action under the California Environmental Quality Act (CEQA) challenging Barstow's adoption of a negative declaration for the Tanger project. Krier later dismissed the action in return for the payment by Barstow of at least $75,000; Barstow, as part of the settlement, asserted that Krier's claims had no merit and had been brought for harassment purposes.

The record as later developed indicates that the Keating lawsuit was dismissed with a mutual cost waiver. Barstow also agreed to recirculate the negative declaration previously prepared, and in return Keating agreed not to further oppose the Tanger project. Barstow also promised that it would not proceed with its "Reimbursement Agreement" with Tanger until "environmental analysis ... has been completed."

The Krier settlement obligated Barstow to prepare an "updated Master Environmental Assessment" at a cost of at least $35,000 ($15,000 payable to a named "environmental attorney" who happened to be Krier's attorney), to create an "environmental advocacy fund" with a contribution of at least $30,000, evidently to go primarily to Krier or her attorney, and to pay her attorney's fees of $10,000.

Barstow's position was that the Krier settlement was prompted by the imminency of a crucial deadline with Tanger Properties; that is, if the Krier litigation was not settled, Tanger would withdraw. Barstow "allowed" Keating to voluntarily dismiss his action in order to avoid the costs and delays which would have been involved in seeking a formal dismissal, which it could have done if Ludwig (and certain of his agents) refused to appear for depositions once the trial court had denied their motions for protective orders. ⁴

The trial court denied the motion, apparently on the ground that the litigation promised good sport. ⁵

Ludwig's motion to strike, and Barstow's opposition, generated a large amount of paperwork. Our acceptance of the propositions that Ludwig was behind the opposition to the Tanger project and that his opposition was based on self-interest makes it unnecessary to detail the evidence adduced any farther than we have done. ⁶

DISCUSSION

I.

We turn first to the statute on which Ludwig relied.

Code of Civil Procedure section 425.16 was enacted to serve a specific purpose, which, happily if unusually, the Legislature explicitly set forth in subdivision (a): "... 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. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process." Accordingly, any "cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution in connection with a public issue shall be subject to a special motion to strike...." (Subd. (b).) If the statute applies, the plaintiff must establish, through the pleadings or affidavits, a "probability" that it will prevail. The special motion to strike is to be filed within 60 days of the service of the complaint, or later in the court's discretion. (Subd. (f).)

The history behind the enactment of section 425.16 has been explained in Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 815-819, 33 Cal.Rptr.2d 446, and we need not repeat the explication in its particulars. The statute was a response to the pervasive use of "SLAPP suits" ⁷ to discourage citizens from seeking governmental action. As noted in Wilcox, the "paradigm" SLAPP suit is an action filed by a land developer against environmental activists or objecting neighbors of the proposed development. However, as the court noted, "SLAPP's ... are by no means limited to environmental issues ... nor are the defendants necessarily local organizations with limited resources." (27 Cal.App.4th at p. 815, 33 Cal.Rptr.2d 446.) The statute is appropriately applied to litigation involving conduct by a defendant which was directed to obtaining a financial advantage. Thus, in Wilcox, section 425.16 was applied to a dispute between groups of court reporters, in which the cross-complainant alleged that cross-defendants were supporting and encouraging litigation charging the cross-complainants with unfair business practices. ⁸

On the face of the matter, Ludwig's activities qualified under the statute. The development of the Barstow mall, with potential environmental effects such as increased traffic and impaction on natural drainage, was clearly a matter of public interest. (See Dixon v. Superior Court (1994) 30 Cal.App.4th 733, 743-744, 36 Cal.Rptr.2d 687, [stressing the importance of public comments in CEQA proceedings "to inform those who ultimately make important decisions regarding the environment."] )

Assuming, then, that section 425.16 applies, Barstow had the burden of establishing a "probability" of success on the merits. (Wilcox, at p. 820, 33 Cal.Rptr.2d 446.) In College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 34 Cal.Rptr.2d 898, 882 P.2d 894, the Supreme Court considered section 425.13, which, somewhat analogously to section 425.16, limits the seeking of punitive damages against health care providers by requiring the plaintiff to establish a "substantial probability" of prevailing on the claim for punitive damages before such a claim may be made. The court rejected the argument that the trial court, in ruling on such a request, should weigh the evidence in making its assessment of the claim. Such an approach, the court noted, would implicate the plaintiff's right to trial by jury. (8 Cal.4th at p. 719, 34 Cal.Rptr.2d 898, 882 P.2d 894.) Instead, the court held that the motion for leave to seek damages should be denied if the evidence introduced "either negates or fails to reveal the actual existence of a triable claim ... This test is largely consistent with the 'prima facie' approach formulated by the Courts of Appeal." The court also pointed out that this showing must be made by "competent admissible evidence within the personal knowledge of the declarant," with reference to the familiar standard applied to evidentiary showings in summary judgment motions. (§ 437c, subds. (b) and (d).)

College Hospital is of particular significance because the court noted in passing a number of other statutes which set up procedural hurdles impeding the assertion of particular claims. (E.g. Civ.Code, § 1714.10, subd. (a) requiring a plaintiff to show a "reasonable probability" of success in a conspiracy claim against an attorney; Code Civ. Proc., § 425.14, requiring a plaintiff to "substantiate" a claim for punitive damages against a religious organization.) The Supreme court found it "unlikely that each subtle difference in phraseology was intended to establish a completely different legal standard." (Id. at...