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Davis Wright Tremaine LLP PRE-SORT 2600 Century Square U.S POSTAGE PAID 1501 Fourth Avenue SEATTLE, WA PERMIT NO FIRST CLASS Davis Wright Tremaine LLP PRE-SORT 2600 Century Square U.S POSTAGE PAID 1501 Fourth Avenue SEATTLE, WA PERMIT NO. 9556 Seattle, Washington 98101-1688 This First Amendment Law Letter is a publication of the law FUTURE BULLETINS VIA EMAIL firm of Davis Wright Tremaine LLP and is prepared by its Communications, Media and Information Technologies We invite you to become a part of our growing database of Department, Kelli L. Sager and Daniel M. Waggoner, co-chairs, subscribers choosing to receive our First Amendment Law Rochelle Wilcox, editor and Steve Chung, associate editor. Letter via email. Electronic delivery will keep you on the cutting edge of industry issues and reduce the amount of Our purpose in publishing this law letter is to inform our clients paper on your desk. and friends of recent First Amendment and communications law developments. It is not intended, nor should it be used, as a If you would like to receive this advisory bulletin electronically, substitute for specific legal advice since legal counsel may be please send an email to: [email protected]. given only in response to inquiries regarding particular factual situations. Be sure to include your full name, title, company, mailing To change your address or to receive additional information, address and phone number in the message area of the email. please contact Margaret Roberts in our Seattle, Washington office at [email protected]. Copyright © 2005, Davis Wright Tremaine LLP ANCHORAGE BELLEVUE LOS ANGELES NEW YORK PORTLAND SAN FRANCISCO SEATTLE SHANGHAI WASHINGTON, D.C. www.dwt.com FIRST AMENDMENT LAW LETTER FALL 2005 CALIFORNIA CODE OF CIVIL BATTLE TO MAINTAIN PUBLIC PROCEDURE § 425.17(C): AND PRESS ACCESS TO A NEW RESTRICTION ON DIVORCE COURTS ANTI-SLAPP MOTIONS by Susan E. Seager by Bruce E.H. Johnson1 Each year, more than 1 million people file for divorce in the United States. In most states, divorce In the fall of 2004, V. Whitney Tilson sent an e-mail court proceedings and records have long been to a Wall Street Journal reporter and others open to the public and press. This tradition of regarding Troy Group, Inc., in which he owned openness has allowed the public and press to stock. The e-mail asked, "Are these guys the scrutinize the shifting rights of men, women, and biggest crooks on the planet or what?" When the domestic partners over their financial assets and company sued for defamation, Tilson moved to child custody and to ensure that the laws are being strike the complaint as a Strategic Lawsuit Against fairly applied. Nancy C. Cott’s recent book, Public Public Participation ("SLAPP"), designed to stifle Vows: A History of Marriage and the Nation (2000), his speech. The company fought back, claiming conducted an exhaustive look at divorce court that a recent statute barred his anti-SLAPP motion. records, newspaper articles, and other materials to Troy Group, Inc. v. Tilson, 364 F. Supp. 2d 1149 posit her theory that the government has used (C.D. Cal. 2005). marriage laws to shape gender roles, reduce the government’s welfare costs, prevent interracial A federal district court ruled against Troy Group unions, and limit the influx of some immigrant this April. But the case brought attention to groups. More recently, The New York Times California Code of Civil Procedure § 425.17(c), a Magazine published The Fathers’ Crusade by Susan new limit on the otherwise broad anti-SLAPP Dominus, a May 8, 2005, article about the rise of statute. Passed in 2003 to curb perceived abuse the fathers’ custody rights movement, which of the anti-SLAPP statute, Section 425.17 provides contends that divorce courts are biased against that the anti-SLAPP statute does not apply to fathers in child custody decisions. Neither of specific public interest actions if certain conditions these publications would have been possible are met. It also withdraws the immediate right of without public access to divorce court records appeal that otherwise is available to a defendant and the ability of the divorcing parties to freely whose SLAPP motion is denied. discuss their cases. Perhaps most controversially, subsection (c) of But in the bellwether state of California, the Section 425.17 exempts from the protection of Legislature has hastily enacted a new statute man- the anti-SLAPP statute "cause[s] of action brought dating the sealing of financial documents filed in against a person primarily engaged in the business of selling or leasing goods or services, including, (CONTINUED ON PAGE FIVE) but not limited to, insurance, securities, or finan- cial instruments…” if two conditions are met. First, the challenged statements must be representations of fact about a competitor’s business operations, goods, or services. The exemption applies to IN THIS ISSUE: representations made for the purpose of securing California Code of Civil Procedure § 425.17(c) PG 1-4 transactions in the person’s goods or services, or statements made in the course of delivering Battle to maintain public and press access PG 1,5-7 them. Cal. Code Civ. Proc. § 425.17(c)(1). to divorce courts California legislature amends anti-SLAPP PG 7-12 (CONTINUED ON NEXT PAGE) statute again CALIFORNIA CODE OF CIVIL PROCEDURE It added that "[t]he filing of the meritless SLAPP motion by the defendant, even if denied by the § 425.17(C) (CONTINUED FROM PREVIOUS PAGE) court, is instantly appealable, which allows the defendant to continue its unlawful practice for up to two years, the time of appeal." Id. The organi- Second, the intended audience must be an actual zation pointed to a rapid increase in the number or potential customer, or a person likely to repeat of SLAPP motions filed, and to seminars like the the statement to a customer. Alternatively, the Practising Law Institute’s "Challenging a 17200 statement can arise within the context of some Claim as a SLAPP Suit." Id. at 7. regulatory proceedings. Id. § 425.17(c)(2). The legislative history of Section 425.17 reflects Section 425.17(c) has not been extensively litigat- that the Legislature was influenced by the ed. However, the section’s legislative history points comments of Penelope Canan, co-author of the to a narrow interpretation of the new statute, and seminal research on SLAPP suits, who wrote, the few cases that have arisen reflect a desire to "How ironic and sad … corporations in California remain true to the legislative intent. have now turned to using meritless anti-SLAPP motions as a litigation weapon. This turns the Events leading to subsection (c) original intent of one of the country’s most SLAPP suits are "brought to obtain an economic comprehensive and effective anti-SLAPP laws on advantage over the defendant, not to vindicate a its head." Id. at 6. She and others urged the legally cognizable right of the plaintiff…. [T]hey Legislature to adopt limits on the types of defen- are generally meritless suits brought by large dants who could bring anti-SLAPP motions. private interests to deter common citizens from "Wealthy corporate defendants, some with their exercising their political or legal rights or to punish own legal departments, simply do not suffer the them for doing so." Wilcox v. Superior Court, 27 chilling effect on their rights when faced with a Cal. App. 4th 809 (1994), disapproved on other lawsuit claiming, for example, false advertising or grounds, Equilon Enterprises v. Consumer Cause, fraud or illegal business practices, that common Inc., 29 Cal. 4th 53 (2002). Concerned about "a citizens suffer when sued for speaking out," disturbing increase in lawsuits brought primarily she argued. Id. to chill the valid exercise of the constitutional rights of freedom of speech and petition for the Subsection (c) faced a wide range of opponents redress of grievances," the California Legislature The first legislative attempt to limit anti-SLAPP enacted the anti-SLAPP statute, California Code motions was SB 789, introduced in 2001. Governor of Civil Procedure § 425.16, in 1992. Gray Davis vetoed the bill, writing that "[t]he First Amendment right to free speech should be The anti-SLAPP statute allows defendants to file a carefully guarded and the Court may be in the special motion to strike non-meritorious claims best position to ensure this right is protected by that arise from the defendant’s exercise of free examining these claims on a case by case basis." speech and petition rights. It operates in two Report of Senate Rules Committee on Senate Bill stages. First, the defendant must make a threshold No. 515, as amended July 8, 2003, p. 6. showing that the lawsuit is the result of protected conduct. Equilon Enterprises, 29 Cal. 4th at 67. The SB 515, which became Section 425.17, was intro- burden then shifts to the plaintiff to show a proba- duced the next year. The bill faced opposition bility of prevailing on the claim. Id. If the plaintiff from groups as varied as the American Civil cannot do so, the suit is dismissed and the plaintiff Liberties Union, the California Chamber of is liable for the defendant’s costs and attorney’s Commerce, and Novartis Pharmaceuticals fees. Id. Corporation. Id. at 7. Novartis feared the bill would close the only avenue available to protect The statute has been invoked in hundreds of cases itself from litigation based on its public positions. and has been praised by media and consumer Id. at 8. The California Building Industry groups. However, in the late 1990s, businesses Association worried that it would eliminate the increasingly used the statute in a way many protection that the statute had offered from characterized as abuse. The Consumer Attorneys NIMBY (Not in My Back Yard) litigation.
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