The recent Court of Appeal decision in Roche v. Hyde, Nos. A150459, A1500462 (filed 6/30/20), though unpublished, presents a cautionary tale for lawyers and clients. The case arises out of sale of a winery in Sonoma County by Roche (“Seller”) to Ram’s Gate, LLC (“Buyer”). The focus of the fraud and misrepresentation claims by the Buyer was Seller’s failure to disclose a seismic report that showed an active fault line under a building pad. Seller maintained the report had been delivered to the attorney for a predecessor entity of Buyer (these entities had common ownership and the same attorney, Hyde), in a previous attempt to buy the winery.

After discovering the seismic issues impacting Buyer’s construction plans, Buyer sued for breach of contract, fraud and negligence, alleging the non-disclosure of the seismic fault. After protracted discovery to obtain Buyer’s files and those of its attorney Hyde to prove prior knowledge of the seismic facts, resulting in multiple court orders to produce requested documents, Buyer dismissed its case without prejudice to avoid court ordered discovery sanctions and also agreed to pay Seller’s attorney’s fees and costs.  End of story? 

In Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, the California Supreme Court examined evidence burdens in the context of the anti-SLAPP statute. Despite resolving anti-SLAPP issues, the opinion has serious implications for summary judgment motions that may not be obvious.

In resolving anti-SLAPP issues, Sweetwater analogized to summary judgment motions. In the anti-SLAPP context, once protected activity has been demonstrated, courts are to accept the opposing party’s evidence as true, and see whether the moving party has nonetheless defeated the opposing party’s showing “as a matter of law.” It doesn’t just sound like summary judgment, the Sweetwater Court expressly described the minimal merit prong of an anti-SLAPP motion as a “summary-judgment-like procedure.”

By Josephine Petrick & Breana Burgos

2019 was another active year for federal appellate anti-SLAPP opinions. Most notably, the circuit split deepened over whether state anti-SLAPP laws even apply in federal court.

Despite an earlier trend of federal courts applying state anti-SLAPP laws under Erie, recent decisions may reflect a new trend toward limiting or even eradicating the application of state anti-SLAPP laws in federal court—even in the Ninth Circuit.  Given the current robust circuit split and many intracircuit tensions discussed below, this is an issue that the U.S. Supreme Court or en banc circuit courts may be called on to resolve in the months and years to come.  These developments are a further testament as to why Congress should consider enacting a federal anti-SLAPP law.  Here’s an overview of the current circuit split and recent developments in 2019.

A recent California Supreme Court decision resolved the issue of what claims can be subject to a Code of Civil Procedure section 425.16 special motion to strike attacking an amended complaint. (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2018) 4 Cal.5th 637.) Specifically, the issue was whether an anti-SLAPP motion attacking an amended complaint could challenge claims already present in earlier versions of the complaint. The Court answered “no.”

While Code of Civil Procedure section 425.16 is alive and well in state courts, the statute may be on its way out in federal diversity cases in the Ninth Circuit. A very recent opinion from that court calls for en banc review, ostensibly to rule that no immediate appeal is available from the denial of an anti-SLAPP motion. But as anyone familiar with the Ninth Circuit’s treatment of California’s anti-SLAPP statute knows, there is a movement afoot to rule that this creature of state procedure has no place at all in federal court. Will California’s anti-SLAPP statute survive?

The ability to launch a preemptive strike against suits attacking speech or petitioning rights shouldn’t depend on which federal circuit has jurisdiction over the district court action. Yet that is how it stands right now when it comes to state law anti-SLAPP statutes deployed in federal diversity actions. At some point the United States Supreme Court will need to resolve the circuit split.

As it stands, the First, Fifth, and Ninth Circuits have allowed anti-SLAPP motions to be brought in federal court. The D.C. Circuit, however, has rejected them. The remainder of the circuits have not yet weighed in, leaving the district courts below them to decide the issue in the first instance. This could mean that a defendant is stripped of anti-SLAPP protection if an action is filed in federal court.