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Using California’s Anti-SLAPP statute to protect your pre-litigation letters

On Behalf of | Aug 16, 2018 | business litigation

As often happens before a party files a lawsuit, letters are sent between the parties (establishing their respective positions) and, sometimes, witnesses. These types of letters are referred to as “pre-litigation letters”.  Because parties to a lawsuit have diverging opinions as to what transpired, one party will occasionally declare the other party’s pre-litigation letter false (or defamatory) and file a lawsuit based on the other party’s pre-litigation letter, asserting various causes of action, including but not limited to libel, defamation, tortious interference, etc.

However, because of the chilling effects such lawsuits were having on the sending party’s First Amendment Right to free speech and to access to the court, the California legislature enacted California Code of Procedure section 425.16, also known as California’s anti-SLAPP statute. “A SLAPP suit-a strategic lawsuit against public participation-seeks to chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances.” Rusheen v. Cohen, 37 Cal. 4th 1048, 1055-1056 (2006) (internal citation omitted).

The California legislature designed the anti-SLAPP statute to summarily and swiftly strike SLAPP suits, as an abusive litigation tactic, before the party subject to hte SLAPP suit has incurred substantial fees. See Flatley v. Mauro, 39 Cal.4th 299, 321 (2006) (“the basic purpose of the anti-SLAPP statute [is] to prevent the chilling of ‘the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances’ ‘through abuse of the judicial process'” (internal citations omitted).)

The benefits of filing a motion are concrete and specific: one, it stays discovery until the motion is resolved, and, two, the granting of the anti-SLAPP motion, not only results in the dismissal of the SLAPP suit, but also entitles the moving party to attorney’s fees. This article addresses California’s anti-SLAPP statute and pre-litigation demand letters. At Kashfian & Kashfian, LLP, we have experience with filing anti-SLAPP motions, and as your counselor, we will fight vigorously on your behalf. Contact our offices to learn more about the services that we provide.

Pursuant to the anti-SLAPP statute, a litigant may move to strike “[a] 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 or California Constitution in connection with a public issue . . ..” Cal. Civ. Proc. Code § 425.16(b)(1). Such acts include “any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body . . ..” Cal. Civ. Proc. Code § 425.16(e)(2).

To apply the anti-SLAPP statute, courts engage in a two-step process. “‘First, the court decides whether the [moving party] has made a threshold showing that the challenged cause of action is one arising from protected activity . . .. [Second] [i]f the court finds such a showing has been made, it then determines whether the [complaining party] has demonstrated a probability of prevailing on the claim.'” Taus v. Loftus, 40 Cal.4th 683, 703 (2007) (omission in original, quoting Equilon Enterprises, LLC v. Consumer Cause, Inc., 29 Cal.4th 53, 67 (2002)).

In analyzing whether the moving party has met its burden of showing that the suit arises from protected activity, the court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” Cal. Civ. Proc. Code § 425.16(b)(2).

Moreover, “although litigation may not have commenced, if a statement concern[s] the subject of the dispute and is made in anticipation of litigation contemplated in good faith and under serious consideration then the statement may be” protected under the anti-SLAPP statue. Neville v. Chudacoff, 160 Cal. App. 4th 1255, 1268 (2008) (internal citations and quotations omitted); Hanover Ins. Co v. Fremont Bank, 2014 U.S. Dist. LEXIS 133959, *15 (N.D. Cal. Sept. 22, 2014) (“[F]iling a lawsuit and related pre-litigation conduct may constitute ‘protected activity’ in the context of the anti-SLAPP statute.”).

Specifically, the anti-SLAPP statute provides protection for “any written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body . . ..” Cal. Civ. Proc. Code § 425.16(e)(2) (emphasis added). Courts have broadly construed the “in connection with” language to include “communications [which are] preparatory to or in anticipation of the bringing of an action.” Rohde v. Wolf, 154 Cal. App. 4th 28, 35 (2007) (emphasis added); Kolar v. Donahue, McIntosh & Hammerton, 145 Cal. App. 4th 1532, 1537 (2006) (anti-SLAPP protection “applies not only to the filing of lawsuits, but extends to conduct that relates to … litigation, including statements made in connection with or in preparation of litigation”). Moreover, the statute does not require any showing that the matter being litigated concerns a matter of public interest. Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th 1106, 1117-18, 1123 (1999).

This position reflects that “courts have adopted ‘a fairly expansive view of what constitutes litigation-related activities within the scope of'” the anti-SLAPP statute. Kolar145 Cal. App. 4th at 1537 (citations omitted). Additionally, the anti-SLAPP statute “has been held to protect statements to persons who are not parties or potential parties to litigation, provided such statements are made ‘in connection with’ pending or anticipated litigation.” Neville160 Cal. App. 4th at 1270 (see e.g. Contemporary Services Corporation v. Staff Pro Inc., 152 Cal. App. 4th 1043, 1055 (2007) (e-mail to customers accusing competitor of litigation-related misconduct); Healy v. Tuscany Hills Landscape & Recreation Corp., 137 Cal. App. 4th 1, 5-6 (2006) (letter from homeowners association to nonparty association members); Dove Audio, Inc. v. Rosenfeld, Meyer & Susman, 47 Cal. App. 4th 777, 784 (1996) (letter to celebrity participants in charitable recording preparatory to lodging complaint with state attorney general); Wilcox v. Superior Court, 27 Cal. App. 4th 809, 821-22 (1994) (statements to nonparties soliciting contributions to litigation fund), disapproved on another ground in Equilon Enterprises, LLC v. Consumer Cause, Inc., 29 Cal.4th 53, 68 fn. 5 (2002)).

“Thus, an action for defamation falls within the anti-SLAPP statute if the allegedly defamatory statement was made in connection with litigation.” Healy,  137 Cal. App. 4th at 5 (citing Briggs19 Cal. 4th at 1109, 1123). “[A] statement is ‘in connection with’ litigation under [the anti-SLAPP statute] if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation.” Neville160 Cal. App. 4th at 1266.

Neville160 Cal. App. 4th 1255 is instructive. There, an employer terminated an employee amid allegations that the employee had misappropriated the employer’s customer lists and solicited the employer’s customers to start a competing business. Id. at 1259. The employer sent a letter to the employer’s customers that accused the employee of trade secret misappropriation and warned customers not to do business with him. Id. at 1259-60. The employer filed suit, and the employee cross-complained for, inter alia, defamation against the employer. Id. at 1260. The employer specially moved to strike the cross-complaint under the anti-SLAPP statute. On appeal from the order granting the motion, the former employee argued the letter was not protected activity, because it was sent more than four months before the employer commenced litigation, the letter did not expressly declare that his client was contemplating litigation seriously and in good faith, and the letter was sent to customers, who were not parties to the action. Id. at 1262.

The appellate court rejected those arguments, holding that the letter was protected; the court reasoned that the letter related directly to the employer’s misappropriation claims, was directed to customers whom the employer could reasonably believe had an interest or were potential witnesses in the dispute. Neville, 160 Cal. App. 4th at 1267-68. The letter did not contain statements unrelated to the allegations forming the basis for the employer’s claims. Id. at 1268. Additionally, the Neville court held that it did not matter that the letter was sent before litigation was filed, as long as the statements were made in anticipation of litigation contemplated in good faith and under serious consideration, standards that were met in that case. Ibid. The court rejected the notion that a four-month period showed litigation was not “imminent,” but rather held the evidence established the letter in fact constituted a threat of impending litigation. Id. at 1268-69. Also, the Neville court held that the anti-SLAPP statute contains no requirement that the recipient of the statement be an actual or potential adverse party. Id. at p. 1270.

Similarly, Healy137 Cal. App. 4th 1, the court held an allegedly defamatory letter sent by a homeowner’s association to members of the association that described litigation between the association and an individual homeowner in a dispute over weed abatement fell within the scope of anti-SLAPP statute, reasoning that:

Because one purpose of the letter was to inform members of the association of pending litigation involving the association, the letter is unquestionably ‘in connection with’ judicial proceedings and bears ‘”some relation”‘ to judicial proceedings.

137 Cal. App. 4th at 5-6 (internal citations omitted).

Likewise, in Briggs19 Cal. 4th 1106, the court granted an anti-SLAPP motion against landlords who brought defamation and emotional distress claims against housing organization based on statements made by organization in assisting tenants with problems that eventually led to legal action against the landlords, because claims “arose from” protected activity.

To the contrary in People ex rel. Fire Ins. Exch. v. Anapol, 211 Cal. App. 4th 809 (2012), the court found the anti-SLAPP statute did not apply. There, various attorneys (who ran what was tantamount to an insurance mil) represented property owners in filing smoke and ash claims arising out of wildfires. Id. at 815-17. In some (notably not all) of the cases, the attorneys filed bad faith lawsuits arising out of the claims. Id. The insurance company alleged that many of the claims were false or inflated and that the attorneys had participated in a conspiracy involving the use of cappers to procure clients. Id. In their anti-SLAPP motions, the attorneys argued that the claims were protected prelitigation communications under the anti-SLAPP statute, because they had been submitted as necessary prerequisites to anticipated lawsuits. The court denied the anti-SLAPP motion because the attorneys relied on their own declarations and not those of their clients. Id. at 828 & n.18 (“While both attorneys submitted declarations from their clients in support of their anti-SLAPP motions, none of the declarations indicate that at the time the claim was submitted, the client seriously anticipated suing Farmers.”); see also, id. at 830 (“no evidence that the insureds anticipated litigation at the time Attorney Amidon submitted their claims” (emphasis in original)). The court further reasoned that in light of the facts and circumstances surrounding the submission of routine insurance claims, it was hard to credit the attorney’s declaration that the claims were submitted in anticipation of litigation, since the attorney’s “viewpoint [was] based on the insurer’s treatment of other claims.” Id. at 829.

At Kashfian & Kashfian, LLP, we have experience with filing anti-SLAPP motions, and as your counselor, we will fight vigorously on your behalf. Contact our offices to learn more about the services that we provide.

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