Three recent cases remind litigants of some important tips when opposing anti-SLAPP motions:
Also: What questions do you want to hear appellate justices answer? The podcast will be hosting some retired appellate justices in future episodes, and we want to put to them the questions you’ve been itching to have answered. Email Tim at firstname.lastname@example.org.
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Tim Kowal 0:03
merely spending money on litigation does not transform a case about misappropriation of money into a protected conduct.
Welcome to the California appellate podcast, a discussion of timely trial tips and the latest cases and news coming from the California Court of Appeal, and the California Supreme Court. And now your hosts, Tim Kowal and Jeff Lewis. Welcome, everyone.
Jeff Lewis 0:26
I am Jeff Lewis.
Tim Kowal 0:27
And I'm Tim Kowal. On this the California appellate law podcast, we try to provide a resource for trial attorneys who are facing appeals. Both Jeff and I are appellate specialist, but we split our practices about evenly between trial and appellate courts. And on this podcast, we try to give our listeners some perspective they can use in their practice.
Jeff Lewis 0:45
All right, everyone, welcome to the podcast and a quick announcement. This podcast is sponsored by Casetext. Casetext is a legal research tool that harnesses AI, and a lightning fast interface to help lawyers find case authority fast. I've been a subscriber since 2019, and I highly endorsed the service listeners of the podcast will receive a 25% lifetime discount available to them if they sign up at casetext.com/calp. That's casetext.com/caLP.
Tim Kowal 1:12
All right, Jeff, I had a couple of cases that I found in the past week that involves slabs, or one of them involves slaps in the other I'm going to I'm going to fit that square peg into the round hole anyway. And the this first one involves lawsuits over money that the lytic that the defendant tried to squeeze into the square hole of a slap and the court said no way. So the takeaway is that appropriating money is not speech in the anti slap context. So see if you can spot the slap issue in this fact pattern. So first plaintiff sues his business partner partner taking money from the partnership. So far, we're clean this is just a basic business tort. No slap plaintiff also alleges that the partner can sealed the wrongful activity. So still nothing swappable so far, but then the plaintiff goes on to allege that the partner used the misappropriated money to pay lawyers for litigation. So what do you say, Jeff? Haha, allegations about litigation. That means it's a slap, right? Nope. A stretch. Too much of a stretch. That's what the defendant ran up against in Manland vs. Milner a second district case this month in August 2022. It's an unpublished opinion, but we're going to talk about that aspect of it. The defendant in that case is, as you mentioned, Jeff was incorrect. Merely spending money on litigation does not transform a case about misappropriation of money into a protected conduct involving the slap or in triggering the slap statute. So here is the courts explanation for why spending misappropriated money on protected litigation conduct is still not a slap, quote, no element of the defendant mandolins claims depends on the purpose for the diversion of funds, but only on the diversion itself. And whether that diversion constituted self dealing, the diversion may have been to further some protected activity, for example, to fund a political campaign or publish a newsletter or fund litigation. But that purpose does not convert Manland suit to one arising from the protected activity and quote, so the the opinion is unpublished. But, Jeff, I think the court should publish that opinion, defendants continue to raise this this angle, this protected activity. Now, the defendants argument was not without some support. There is a very, very commonly cited case routine versus Cohen. It's commonly cited in an anti slap motions in an effort to transform a misappropriation claim into a protected conduct triggering the anti slap statute. Wherever the misappropriated money is used for litigation spending it on lawyers for litigation or for some other protective conduct. Defendants often file an anti slap motion saying, Look, your your complaint alleges protected conduct. So it's a slap. What do you think, Jeff, do you think do you think this case ought to be published you think comes up often enough?
Jeff Lewis 4:07
I think this case is correctly decided. And I think there is an abuse. Sometimes people, defense lawyers read the word court or litigation in the pleadings, and all of a sudden, they automatically think about anti slap. And I think the court got it right here that what a person intends or believes they're going to do with the money at some point is not terribly relevant to establishing a prima facia case and therefore shouldn't be relevant for slap purposes. And then I think you and I should penned a letter to the Court of Appeal politely asking them to, to publish,
Tim Kowal 4:40
I'll send you a draft we'd love to have your your cosign on it. Personally. I had a case where I represented the plaintiff, and the allegations were quite similar. There was allegations of misappropriation of funds. There as circumstantial evidence, we talked about how the funds were used for subsequent litigation conduct and wallah we got hit with anti slap motion, we defeated it in the trial court. But then we spent two years in the Court of Appeal got it affirmed, but in an unpublished opinion, and so if we had, if we had gotten that opinion published, then maybe man lid wouldn't have brought his anti slap motion here. What do you think if we, if we go forward with this request for publication and get it published, do you think that will deter these kinds of lawsuits, or these kinds of slap motions rather
Jeff Lewis 5:25
well, and you know, listeners of our podcast, looking for ways to shift attorneys fees and litigation like this, instead of doing an anti slap in a in a case like this with theft of money, they could just invoke that penal code section you referred to in our last episode, and find another way to get attorneys fees and not use a slap.
Tim Kowal 5:42
We're always looking for angles. Yeah, that penal code section we talked about 496 C. All right. Here's another case that I that I thought maybe I tried to stump you with Jeff, and the question, the the kind of the umbrella question here is, how can you enforce an appellate stay? Now in our last episode, we talked with Joseph chore about judgment enforcement and state of judgment enforcement. And one of the aspects that we talked about was, now when you file an appeal, you're supposed to get an automatic stay of enforcement. But the trick is how to enforce an automatic stay when the other side doesn't agree with you that that there's an automatic stay in place.
Jeff Lewis 6:21
It's only as automatic as the courts and your opposing counsel, believe it.
Tim Kowal 6:25
That's right. So in practice, the automatic stay sometimes become which becomes wishful thinking. For example, when it comes to fee awards on slap motions, there is the coils versus parent decision. And my recent article, which persuasively demonstrates that slap fee awards are cost awards, and thus automatically stayed pending appeal. But when we, as we talked about in the last episode, Jeff, you and you and Joseph demonstrated that there are still a lot of attorneys holding on to the bad reasoning in Dowling versus Zimmerman holding that slap fee awards or like money judgments, and thus, not automatically stayed on appeal. And and I'm smirking at you, Jeff, because obviously, these are both published opinions, they may both be cited by litigants in support of either one of those propositions, although they are their opposite one another. But Jeff, if you are representing a plaintiff, in an appeal of a slap award against and so you got to, you know, usually you are the moving defendant, but sometimes you're the plaintiff defending against the slap motion. So let's say you're, you're defending against the slap motion on behalf of the plaintiff. And you want to enforce the automatic stay under Qualls, because you've got to an attorney's fees award against you. And the trial court had just got it wrong. It was not a slap it was it was like the mandolin case we just talked about. But the court went along with it and found that there was protected activity. So now you've got into a slap attorneys fees award against you, you want to get it reversed. But in the meantime, you want to prevent your client from getting his bank account white, so you want to enforce the automatic stay under the coils decision. So what do you do? How do you affect the automatic stay when the other side is saying no, no, no, there's the dowel in case I'm able to to I'm able to go forward and enforce it. Autumn notwithstanding the stay.
Jeff Lewis 8:15
Yeah, maybe we should retitle this segment, not stump Jeff. But make Jeff squirm because I don't like being in this position. You know, I typically do represent defendants but uh, in the rare case, that I actually represented a plaintiff in a smack a strategic motion against credible claims that was improperly granted. And there were fees out there that I wanted stayed, I would argue that costs are not routine costs. And the one way shifting provided by the anti slap statute, maybe makes quills more persuasive, the Darling and that limited instance. And I'd file motion the trial court to confirm the automatic stays in place, but I would certainly hold my nose while making the argument and I'd do my best to argue for a discretionary stay based on the specific facts of the case.
Tim Kowal 8:58
Okay. All right. I think that's right. But here's where I want to talk about something kind of kind of nitty gritty, and we're going to talk about labels. So if you're going to file a motion to enforce the stay, that's the type of motion that the aggrieved party filed in this recent case, Merit versus specialized Loan Servicing LLC. It's a sixth district case, this August 2022. It's not a slap case. But the principles concerning halting a foreclosure sale in to honor the the automatic appellate stay are still applicable here. So the trial court denied the motion for for stay to enforce the automatic appellate stay. And on appeal, the court dismissed the appeal because an order denying enforcement of a stay is not an appealable order. As the merit court noted an order denying enforcement of an automatic stay is not listed as among the appealable orders under Code of Civil Procedure section nine oh 4.1. Instead, the court said the appropriate method of challenge During the denial of an order to enforce the stay under Section 916 is a petition for writ of super Sidious. But the curious thing, Jeff about this is that the appellant did file a motion a petition for Super Sidious. And it was summarily denied, as most repetitions are, because unlike an appeal, a writ petition, may be summarily denied. You're not entitled to a reasoned decision that you are in direct appeal. That's in addition to the statistical likelihood of prevailing The other reason you want to be be able to file a direct appeal is because you're entitled to a reasoned decision, not just a one word postcard that says denied. So Jeff, here's what I would suggest you could try. If you want to get direct review of an order denying and enforcement of the automatic stay. And here's my suggestion, you need to file the motion for enforcement of stay labeled as an application for an injunction because it's it's effectively the same thing as enforcement of the state. You want to enjoin the other party from wiping bank accounts or leaning on property in what have you. But the critical difference is denials of injunctions are appealable. Under Section nine, oh 4.1 Subdivision a six, what do you think, Jeff, by by that strategic labeling and in citation of the injunction statutes? Would that? Would you think that would work to bring it within the appealability? Under nine? Oh, 4.1? Well, yeah,
Jeff Lewis 11:25
great idea. I don't ever want you representing my opponents and slap matters because of this idea. But let me ask you this, if a slap fee award is automatically stayed without the need for posting a bond or anything, and you call it an injunction to go in and prevent enforcement or recognize the automatic stay, and injunctions are void unless there's a bond ordered, could you then be forcing as the plaintiff, your client to post a bond to support an injunction whereas they wouldn't normally be required to post a bond?
Tim Kowal 12:00
That's a good point. I do not think you could use labeling to get around the statutory injunction statutory stay and bond requirements. So if, if this is a case, a money judgment. Now now under Qualls, remember, if we're talking about this as a slap than a slap fee award is deemed a cost Award, which is exempt from the bond requirements for money judgment. So it's not treated as a money judgment. But assuming we were talking about a money judgment, you're trying to enforce the automatic stay of a money judgment, you would still have to file or you still have to post the bond as required under nine 17.1. Don't you think they're I don't I don't think trial court or a court of appeal would be taken with the idea that you can get around those by labeling your motion as as an injunction motion? No. Right. Okay. But one other case, just kind of rounding out getting a trifecta of slap related cases. This this case Ray is versus Escobar out of the second district also in August 2022. Case held that a late slap motion. Although the trial court allowed the filing of the slap motion beyond the 60 day presumptive requirement, it was an abuse of discretion to allow the late filed slap motion here. So the defendant in this case filed an anti slap motion outside of the 60 day window. And while that window may be enlarged in the trial court's discretion, there are limits to that discretion. And so what happened here in this case, the slap motion was filed over six months after the amended complaint, but it was filed over two years after the original complaint. The case the opinion wasn't entirely clear, but I take it that the court felt that the slab issues were raised in the original complaint. And so the amended complaint did not renew the 60 day window to file the anti slap motion. Also, in this case, the parties had engaged in considerable motion and discovery practice and the defendant. This seemed to be the most important reason for the court, the defendant gave no reason for the delay. Why that 60 day window needed to be so enlarged to allow for a motion filed over two years after the original filing of the complaint. So the trial court's discretion to consider late filed slap motions is not unlimited. That's the upshot here, the court must consider the length of the delay. The reasons offered for the delay and potential prejudice to the plaintiff. And the court didn't consider those things here. So the flap order was reversed. Yeah, interesting. I
Jeff Lewis 14:31
gotta tell you, I've never actually litigated the issue of elite filed anti slot motion and I've never dealt with appeal in terms of the courts discretion. This interesting case, even though it's unpublished Court of Appeal employed a an analysis very similar to late filed petitions to compel arbitration, looking at you know, how did the parties act? Did they act like they wanted an off ramp out of litigation and into the world of contractual arbitration, or did they try to take advantage of all the court powers in terms of discovery and motion practice, and is a late anti slap motion does it for the purposes of a slap, which allows for early exit of the case and, and avoiding that discovery of motion practices. Interesting. I appreciate you bringing it to my attention. You're muted.
Tim Kowal 15:15
And now Jeff, if the defendant had come to you, in this case, before filing the bladed anti slap motion, what sorts of criteria or factors would you try to raise to that the court could could rely on for a valid exercise of its discretion to enlarge the window to file the slap motion? Yeah,
Jeff Lewis 15:34
good questions. One wasn't sure which of the parties was improper here. But if it was the slapping party, the person filing the anti anti slap motion was improper. That'd be something I'd point the court to. And the other thing is prejudice. You know, who's really prejudiced by the late filing of a slap? I didn't see really a discussion of prejudice in this case.
Tim Kowal 15:54
Right. All right. Yeah. That concludes my anti slap tour de force. And you had a case about First Amendment issues.
Jeff Lewis 16:01
I do love First Amendment cases, and a case came out today, the day we're recording this podcast in the US Court of Appeals for the District of Columbia Circuit, the DC Circuit. And this is not a California case. But I found it interesting, both in terms of legal writing and substance. The introduction to this case is simple. And to the point. And for the writing alone, I really think the opinions noteworthy hears from the courts introduction. Lisa Guffey and Christine Smith work at the Administrative Office of the United States courts, when they are away from work, they want to express support for their preferred candidates in partisan elections. AiO employees could do that for the first 79 years of the agency's history. But since 2018, the EO has forbidden it that prohibition violates the Free Speech Clause of the First Amendment. Great, powerful, clear, succinct statement. It's interesting, the opinion doesn't really state why and that's most the biggest question I have about this case. But back in 2018, the Administrative Office issued a list of like nine restrictions they were imposing on employees what they could and couldn't do, off duty went away from my work. And these are the things they were prevented from doing included making public expressions of support, donating money to campaigns wearing buttons or displaying signs at home, attending a party's convention, or attending a candidate's campaign events. Now, these
Tim Kowal 17:26
are just in their personal capacities, not in any official capacity,
Jeff Lewis 17:30
correct off duty and the people in ministry of office do not decide decisions, they are not typically what you think of in terms of judicial employees may provide technology support and resource and administrative support to make sure justices can travel here and there. And that the judges here in cases are the lawyers who work under the supervision of the courts on panels have the tech they need to do what they do. And the administrative office went to court and tried to justify these regulations saying it's important to protect the perception of the judiciary as impartial. That's why they put these regulations in place in 2018. But in this decision that was issued today, because administrative office employees do not actually decide cases there's too tenuous a connection between these employees and any perception impartiality in the judiciary. And it's just an interesting decision reminder, the public employees do retain first amendment rights in terms of what they can and can't do when they're off duty.
Tim Kowal 18:34
Yeah, that sounds like the right outcome to me. What about you, Jeff? And it does seem like to me too tenuous a connection between, you know, the tech support workers at the court and other administrative clerical type workers who who are not involved in any way in deciding cases, they should be able to preserve their First Amendment liberties when off duty. No,
Jeff Lewis 18:56
it's absolutely the right result. And I just I'm super curious, maybe a listener of a podcast will email me the answer what happened in 2018, that cause the EO to issue these nine regulations that were struck down in this decision? What was the problem that they were trying to fix that that for decades, employees could do this? And all of a sudden they could,
Tim Kowal 19:16
that would that would make for a valuable piece of journalism? Yeah. Yeah. Okay. Well, we just have a couple of tidbits to finish us off today. listeners should note that next month on September 20, we're going to have David Ed injure on the show to talk about the Supreme Court vacancy as most, as many of our listeners may have heard this, the Chief Justice has announced her retirement and Governor Newsom has announced a replacement and David editor is going to be talking about that and some of the discussion and and mild controversy that surrounds whether her replacement may be nominated merely or or has to be appointed. Can the governor delay the appointment or nomination until after the election to prevent the need? For a retention election, so we'll ask David editor that on our episode on September 28, actually, September 28, will talk with David integer and the podcast will be released on the 27th of September. Great,
Jeff Lewis 20:12
great. And then, going back about 30 episodes, we interviewed someone about the Charlie Manson genetics case someone was an heir to Charlie Manson. And a quick announcement about that episode, State of California has approved us as MC le providers for that episode. And stay tuned in the weeks to come for details on how to claim your credit if you listen to that episode for not just m CLE credit, but for appellate specialization, M CLE. Credit, we're looking to become M CLE providers for all our episodes, but for right now, Episode 10 has been approved. And we'll we'll get you the details on how to claim your credit in the coming weeks.
Tim Kowal 20:53
We are always looking to enhance the value of this podcast for our listeners. Yeah. All right. Well, that wraps us up for this episode. And a quick Oh, Jeff, you had a question for our listeners.
Jeff Lewis 21:04
Yeah, yeah, quick question for our listeners. If we were to have one or two retired California appellate justices, as guests in the next few weeks, what questions would you want us to ask if those appellate justices email us your best suggestions at info at Cal podcast.com.
Tim Kowal 21:23
And I remember when we have been chats on the show, and you talked about how it was important for both the bench and the bar to kind of cross pollinate, you know, the the bar wants to know what the bench is thinking. And the bench also wants to know what the bar is thinking. So this is a good opportunity to to help further that cross pollination. And we also want to again, thank case text for sponsoring our podcast each week, we include links to the cases that we discuss, and we use casetext to provide our listeners links to those cases, and listeners can find a 25% discount available to them if they sign up to casetext at casetext.com/CA L P.
Jeff Lewis 22:01
And if you have suggestions for future episodes, including questions for retired California appellate justices, please email us at info at Cal podcast.com. And in our upcoming episodes, look for tips on how to lay the groundwork for an appeal when preparing for trial.
Tim Kowal 22:15
So you next time,
you have just listened to the California appellate podcast, a discussion of timely trial tips and the latest cases and news coming from the California Court of Appeal and the California Supreme Court. For more information about the cases discussed in today's episode, our hosts and other episodes, visit the California appellate law podcast website at Cao podcast.com. That's c a l podcast.com. Thanks to Jonathan Cara for our intro music. Thank you for listening and please join us again
Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at email@example.com or (714) 641-1232.
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