Paul for Council v. Hanyecz

• Decision Date: 05 January 2001
• Docket Number: No. B140077.,B140077.
• Citation: 102 Cal.Rptr.2d 864,85 Cal.App.4th 1356
• Court: California Court of Appeals Court of Appeals
• Parties: PAUL FOR COUNCIL, Plaintiff and Appellant, v. Ricki HANYECZ et al., Defendants and Respondents.

102 Cal.Rptr.2d 864

85 Cal.App.4th 1356

PAUL FOR COUNCIL, Plaintiff and Appellant, v. Ricki HANYECZ et al., Defendants and Respondents.

No. B140077.

Court of Appeal, Second District, Division 3.

January 5, 2001.

William J. Cleary, Jr., Los Angeles; Paul M. Christiansen, for Plaintiff and Appellant.

Reed & Davidson, Dana W. Reed and Bradley W. Hertz, for Defendants and Respondents.

CROSKEY, Acting P.J.

In this appeal, the plaintiff challenges the determination of the trial court that plaintiffs suit is what is commonly known as a SLAPP suit (Strategic Lawsuit Against Public Participation [Code Civ. Proc, § 425.16 ("section 425.16")]). Based on such determination, the trial court struck the plaintiffs complaint and dismissed the suit when the plaintiff failed to establish a probability of success on his claims. Thereafter, the defendants, who are Ricki Hanyecz, Michael Hanyecz, and Sima Katzir, moved for an award of attorney's fees and costs. The court granted defendants' motion, and the plaintiff challenges that ruling as well.¹

We find the trial court erred when it (1) ruled this is a SLAPP suit, and then (2) required plaintiff, upon pain of dismissal, to demonstrate the probability of the suit's success. We reach this conclusion because the record demonstrates the defendants were not engaged in a valid exercise of their constitutional rights of freedom of speecn or petition for rearess 01 grievances. We thus conclude this suit should not have been dismissed. Given our conclusion, it necessarily follows that defendants were not entitled to an award of costs and attorney's fees.

BACKGROUND OF THE CASE

1. The Complaint

Plaintiffs complaint alleged he was elected to the Laguna Niguel City Council in 1989. In 1994, Paul for Council was the official committee acting on plaintiffs behalf in his bid for another term on the council. The thrust of the complaint is that defendants interfered with plaintiffs candidacy by influencing the election with illegal campaign contributions for one of his opponents. Plaintiff alleged that defendants' acts violated the Political Reform Act of 1974 (Gov.Code, § 81000 et seq., ["the Political Reform Act"]).

2. Defendants' Motion to Strike

Defendants moved to strike the complaint, citing section 425.16, the anti-SLAPP statute, as their authority to do so.² They contended this action is a SLAPP suit, ana iurtner contended there was no probability that plaintiff would prevail on his claims. Their moving papers, however, show that they in fact did violate the Political Reform Act when they laundered campaign contributions to persons running for local and state offices. According to the appellate record, they did this by having family members submit contributions to the campaigns of various candidates, and then reimbursing those family members for the amounts contributed. Defendants acknowledge that a $300 contribution to a person running against plaintiff was made by them in this manner.³ In making their motion to dismiss this suit, defendants argued that their money laundering was "in furtherance of [their] constitutional rights of free speech" and "arises out of acts in furtherance of [their] constitutionally protected conduct." (Italics omitted.)

In his opposition to defendants' motion to strike his complaint, plaintiff asserted that section 425.16 does not apply in this case because defendants' actions in laundering campaign money do not constitute constitutionally protected activity. As for defendants' contention that he has no possibility of prevailing on his causes of action, plaintiff contended he was not required to meet that issue in opposing the motion to strike because his suit does not fall under section 425.16; that is, it does not arise from activity of defendants that is in furtherance of their constitutional rights of petition for redress of grievances or free speech. Plaintiff also asserted that the motion to strike his complaint is frivolous and therefore he is entitled to costs, as provided for in subdivision (c) of section 425.16.⁴

Defendants disputed plaintiffs analysis of what prompts application of section 425.16 protection. They contended their campaign contribution laundering "need not be constitutionally protected for the anti-SLAPP statute to apply; [rather, their] actions merely must arise from an act in furtherance of defendants' rights of free speech or petition."

In granting defendants' special motion to strike, the trial court ruled that defendants' acts which prompted this suit "were, by definition, acts in furtherance of defendants' constitutional rights of free speech. Political contributions are at the very core of First Amendment activity, . . . This is a SLAPP suit." The court also ruled that because plaintiff had not shown he has a reasonable probability of prevailing on any of his causes of action, judgment should be entered in defendants' favor. Thereafter, judgment was so entered, the complaint was dismissed, and defendants were awarded section 425.16 attorney's fees and costs. Plaintiff has now prosecuted this timely appeal.

ISSUES ON APPEAL

In this appeal we address the question as to whether a defendant can properly claim that an action filed against it is a SLAPP suit for which it is entitled to section 425.16 protection, when its conduct involved actions which violate the law; or to put it another way, can a defendant successfully assert that although the acts in which it engaged, and which are the subject of the plaintiffs complaint, were illegal, they were done in furtherance of the constitutional rights of free speech or petition for redress of grievances in connection with a public issue and therefore the plaintiff is required, under section 425.16, to meet the predicate showing mandated by that statute?

As we explain, we hold that in such circumstances, defendants are not entitled to protection under section 425.16. Therefore, in the instant case, the trial court erred when it (1) required plaintiff to establish a probability that he would prevail in this suit, (2) struck the complaint and dismissed the suit when plaintiff failed to do so, and (3) awarded defendants attorney's fees and costs of suit.

We also consider the process that a trial court uses in determining whether a defendant who brings a section 425.16 special motion to strike has successfully met its burden of showing that the acts upon which the plaintiff bases its causes of action were ones taken by the defendant in furtherance of the defendant's rights of petition or free speech in connection with a public issue.

Finally, we address plaintiffs assertions that he is entitled to have defendants pay the trial court and appellate attorney's fees and costs which he incurred in connection with defendants' motion to strike.

DISCUSSION

1. The Underlying Legislative Purpose of Section 425.16, and the Nature of a SLAPP suit

The Legislature's stated purpose in enacting section 425.16 is found in subdivision (a) of that statute. Subdivision (a) states: "The Legislature finds and declares 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. 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. To this end, this section shall be construed broadly." (Italics added.)

"SLAPP plaintiffs do not intend to win their suits; rather, they are filed solely for delay and distraction [citation], and to punish activists by imposing litigation costs on them for exercising their constitutional right to speak and petition the government for redress of grievances. [Citation.]" (Dixon v. Superior Court (1994) 30 Cal.App.4th 733, 741, 36 Cal.Rptr.2d 687.) SLAPP suits are filed to prevent citizens from exercising their political rights, and to harm those who have exercised those rights. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 815, 33 Cal.Rptr.2d 446 ["Wilcox"].) "SLAPP suits are brought to obtain an economic advantage over the defendant, not to vindicate a legally cognizable right of the plaintiff. [Citations.]" (Id. at p. 816, 33 Cal.Rptr.2d 446, italics omitted.) "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. [Citations.]" (Ibid.) Therefore, the anti-SLAPP legislation found in section 425.16 provides an efficient means of dispatching, early on in a lawsuit, a plaintiffs meritless claims, and thus encourages, to use the Legislature's words, "continued participation in matters of public significance." (§ 425.16, subd. (a).)

2. Burdens of the Parties in a Section 425.16 Motion to Dismiss

Section 425.16, subdivision (b)(1), requires the trial court to engage in a two-step process when determining whether a defendant's section 425.16 motion to strike should be granted. First, the court decides whether the defendant has made a threshold prima facie showing that defendant's acts, of which the plaintiff complains, were ones taken in furtherance of the defendant's constitutional rights of petition or free speech in connection with a public issue. (Wilcox, supra, 27 Cal. App.4th at p. 820, 33 Cal.Rptr.2d 446.) If the court finds that such a showing has been made, then the plaintiff will be required to demonstrate that "there is a probability that the plaintiff will prevail on the claim." (§ 425.16, subd. (b)(1); DuPont Merck Pharmaceutical Co. v. Superior Court (2000) 78 Cal.App.4th 562, 567-568, 92 Cal.Rptr.2d 755.)⁵ The defendant has the burden on the first issue, the threshold issue; the plaintiff has the burden on the second issue. (Wilcox, supra, 27 Cal. App.4th at p. 819, 33 Cal.Rptr.2d 446 et seq.) On...