Thursday, July 3, 2014

Another Dumb Anti-SLAPP Appeal

Old Republic Const. Program Grp. v. The Boccardo Law Firm, Inc., No. H037989 (D6 June 27, 2014).

Defendants stipulated to keep some money in an escrow account pending the litigation of a dispute. When the litigation ended, without resolving the dispute, defendants took the money out of the escrow. Plaintiffs sued for, among other things, breach of the stipulation. Defendants responded with an anti-SLAPP motion. So the issue is: does a lawsuit for violating the stipulation by withdrawing the money from the escrow account arise from protected activity?

One thing is clear: entering the stipulation was clearly protected activity because it is a communicative act performed in a connection with a litigation. See Cal. Code Civ. Proc. § 425.16(e)(2). But that begs the question: Does the breach of contract case arise from the entry of the stipulation? The court here says no. 

After reviewing the overlapping and often abstract tests that have been applied to answer that question, the court comes up with a new one: “a cause of action can only be said to arise from protected conduct if it alleges at least one wrongful act—conduct allegedly breaching a duty and thereby injuring the plaintiff—that falls within the act’s definition of protected conduct.Plaintiff’s contract claim did not assert that it was wrongful to enter the stipulation; it asserted that it was wrong to breach it by taking the money out of escrow. The mere fact that an agreement is reached in connection with litigation doesn’t mean that a claim for its breach arises from protected activity. Otherwise, every claim for breach of a settlement agreement would draw an anti-SLAPP motion, which does not make sense.

Taking money out of the escrow is not itself protected activity. Withdrawing funds is not communicative at all, so the first three kinds of protected conduct in § 425.16(e)(1)–(3) don’t apply. Although § 425.16(e)(4) does protect “conduct in furtherance” of certain First Amendment-protected rights, it is limited to such acts “in connection with a public issue.” So even if defendants could somehow say that taking money out of an escrow related to their First Amendment rights, because the underlying dispute was about an insurance setoff in a workers’ comp. dispute, it was, by no means, a public issue.


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