Monday, October 5, 2015

Just More Chances to Lose

San Diegans for Open Gov’t v. Har Const. Co., No. D066514 (D4d1 Sept. 17, 2015).

A good-government group brought this case to cancel a construction contract under Government Code § 1090 as the product of a corrupt bargain between a San Diego-area school district and a contractor. More than a year into the litigation, Contractor filed an anti-SLAPP motion, which the trial court denied because Plaintiff established a likelihood of prevailing on the merits.


The court of appeal affirms, but for two other reasons: the motion was too late and, in any event, the public interest exception in § 425.17(b) applies. Although it doesn’t say so, by disposing of the appeal this way, the court avoids the issue of whether a complaint arising from shenanigans in the awarding of public contract arises from protected activity under § 425.16(b), an issue that is in significant part under review by the Supreme Court in City of Montebello v. Vasquez.

As to the timing, the motion was unquestionably filed well after the presumptive sixty-day limit in § 425.16(f). The Contractor tried to justify the late filing because the Court had just granted a stipulation to shift the District from being denominated as a nominal defendant into a relief-interested party. (An intervening election resulted in the replacement of some of the allegedly crooked board members, so the District moved from being hostile to the relief to somewhat favorably disposed to it. Although it still lacked in a disinterested quorum that would approve it formally intervening in the litigation.) 

When the court it granted the stipover Contractor’s objectionit specifically noted the realignment was only nominal and had no substantive effect on the case. So, unlike an amended complaint that adds First Amendment implicating causes of action, the stipulation didn’t change the litigation in any significant way. So there was no need to consider the sixty-day clock restarted. Nor did any of the policy reasons behind the anti-SLAPP statutein particular, the expeditious pre-discovery disposal of meritless first-amendment burdening claims—justify a belated filing. Discovery was well underway and the parties had been litigating the case for a year. So the trial court abused its discretion in considering a late motion.

And in the alternative, the motion should also have been denied under public interest exception in § 425.17(b). As the court explains, the public interest issue is threshold—if it applies, the court shouldn’t reach the merits of the motion. The exception applies a three-element test requiring: (1) relief sought on behalf of the general public; (2) an important public interest at stake; and (3) a need for private enforcement. Most of the dispute here concerned (3), particularly given the district’s realignment in the case. 

That the district might have belatedly become favorably disposed to the relief didn’t make private enforcement unnecessary. Fact is, the District declined to bring a § 1090 action on its own (although it had somewhere along the line suggested that it might raise § 1090 as a defense in a separate collections action brought by Contractor). And indeed, since the public interest exception should apply to the posture of the case at the outset there was no basis to think that public enforcement by the then-conflicted school board would have been forthcoming at the time the case was filed.

Affirmed.

This case is more interesting for the issues it doesn’t address than the ones it does. As I said, whether a legislative body’s award of a contract is protected activity is a bit of an open question. (Although the answer, to me at least, is pretty clearly no.) 

And even if it is, then § 1090 contains a specific legislative authorization for a cause of action to obtain return of funds paid under a corrupt contract. When a statute creates an express cause of action for which every possible application would be swept into a general defense, there’s an interesting argument that the Legislature implicitly intended to except to those cases from the defense. That’s how it works with the Civil Code § 47(b) litigation privilege, which addresses issues closely related to the anti-SLAPP analysis. The two federal cases to have addressed the issue come out in different directions. Compare Davis v. Hollins Law, 942 F. Supp. 2d 1004, 1013 n.12 (E.D. Cal. 2013) (suggesting in dicta that anti-SLAPP motions cannot apply to statutory causes of action that inherently arise from activity defined as protected); with Agnir v. Gryphon Solutions, LLC, No. 12-CV-04470-LHK, 2013 WL 4082974, at *15 (N.D. Cal. Aug. 9, 2013) (holding that they can). In any event, no court will ever need to reach the issue for § 1090 cases, because they don’t really arise from protected activity, or because, like here, the public interest exception applies.

So that seems like five different ways for defendant to lose.

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