This article originally appeared in the Daily Journal on January 22, 2018.
Lawyers who try to game the system by appealing a frivolous anti-SLAPP motion may succeed in causing their opponent undue cost and lengthy delay, but they do so at the risk of being sanctioned, or perhaps worse, being lambasted by the Court of Appeal in a published opinion. Which is precisely what happened recently to Dignity Healthcare and its lawyers in Central Valley Hospitalists v. Dignity Health.
In Dignity Health, plaintiff, an association of doctors, filed a complaint against Dignity Health, alleging causes of action for a variety of business torts involving Dignity Health’s alleged interference with plaintiff’s business and its relationships with its doctors. The complaint was conclusory, with little factual support. In particular, the complaint alleged no facts having to do with Dignity Health’s peer review activities, and in fact expressly alleged it was not based on any wrongs or facts arising from any peer review activities.
Disregarding the express pleading, and despite that plaintiff offered to stipulate there would be no discovery as to peer review and offered to amend the complaint to clarify the bases of the business torts at issue, Dignity Health filed an anti-SLAPP motion, contending that while plaintiff’s complaint did not state a claim, to the extent it could state a claim, the claim had to be based on peer review — and thus on protected activity.
In denying the motion, the trial court called Dignity Health’s motion “aggressive” and observed that it was unaware of any cases allowing courts to ignore what a complaint states and look at facts that are not alleged to determine whether the unpled facts constitute protected activity. The court also noted that, since plaintiff stipulated to Dignity Health’s demurrer and would be amending the complaint, a new motion could be made if the amended complaint alleged facts involving peer review activity. Nevertheless, Dignity Health appealed.
The First District Court of Appeal, in a published decision authored by Justice James Richman, who has authored numerous opinions lamenting the abuse of the automatic stay on appeal of anti-SLAPP motions, easily affirmed the denial of the motion by summarizing several cases holding that it is inappropriate for a court to look beyond the facts alleged in a complaint to determine whether other facts are truly in issue and whether those other facts constitute protected activity. The court did not, however, leave it at that.
Recognizing the appeal bore all the hallmarks of being pursued solely for delay, the court advised counsel in advance of oral argument that it was considering imposing sanctions on its own motion. Three days later, defendant sought to dismiss the appeal — a request the court rejected. Defense counsel also sent a 13-page letter to the court asserting that sanctions were not appropriate because counsel had believed the appeal was meritorious until the Supreme Court clarified anti-SLAPP law as applied to peer review activity. The court did not buy it, noting that counsel’s entire defense was based on the application of anti-SLAPP law to peer review activities, which were expressly not at issue in this case.
The court also flatly rejected counsel’s claim that the appeal was not prosecuted for purposes of delay concluding that the frivolous appeal could not “be a manifestation of anything but delay.” Notably, the court observed that Dignity Health sought and obtained 90 days of extensions on its briefing, despite that three of the four attorneys on the appellate brief were counsel below, and that it obtained almost one year of continuances of oral argument due to conflicts in counsel’s schedule, despite that the attorney whose schedule was at issue was the one attorney who did not participate below.
In the end, the court did not issue sanctions, but apparently only because plaintiff’s counsel did not reply to the issue of sanctions. It seems apparent that the court was disappointed, and would readily have granted sanctions, but instead believed that justice was served by publishing its opinion lambasting counsel repeatedly by individual and firm name.
Over the years, the courts, including the Supreme Court, have oft noted that the anti-SLAPP cure has become the disease and suggested that the Legislature amend the anti-SLAPP law to curb the obvious abuses. Some possible fixes the Legislature could consider:
- Eliminate the right to an immediate appeal altogether — while the right to appeal can be important, it should not trump all else. If the Legislature eliminated the right to an immediate appeal, a defendant losing a potentially meritorious anti-SLAPP motion is not without a remedy because it could seek a writ of mandate and a stay of trial court proceedings pending resolution of the writ.
- Limit the right to an immediate appeal to limited circumstances — if the Legislature is unwilling to eliminate the right of immediate appeal altogether, it could limit the right of appeal to motions that are filed within the allotted 60 days and which — if granted — would dispose of the entire action. The Legislature could also eliminate the right to an immediate appeal where the trial court has found the motion frivolous. If a plaintiff establishes this high showing, the defendant who has been found to abuse the process once should not be permitted to further abuse the process by appealing the denial and obtaining an even lengthier delay of the proceedings.
- Overrule Varian — the Legislature could eliminate the incentive to appeal frivolous anti-SLAPP motions by overruling Varian and providing that appeals from the denial of an anti-SLAPP motion do not automatically stay proceedings in the trial court. Indeed, the Varian court expressly noted that this was an issue for the Legislature.
- Provide expedited procedures for appeal — although the Varian court noted that the courts of appeal should attempt to resolve anti-SLAPP motion appeals as expeditiously as possible, and dismiss frivolous appeals, as at least one court noted, that is easier said than done. A simple solution would be to streamline appeals from the denial of an anti-SLAPP motion, providing for an expedited briefing schedule, no extensions, no grace periods and reduced brief size.
Alas, the Legislature has yet to take up the mantle of taming this beast. As a result, the courts of appeal, as in the Dignity Health case, have begun to take matters into their own hands and consider imposing sanctions for abuse on their own motion. The lesson is, until the Legislature amends the anti-SLAPP statute to curb some of the abuses that have become prevalent, counsel pursuing frivolous appeals do so at the risk of sanctions or, perhaps worse, a tarnished reputation.
Kelly Woodruff is of counsel with the California Appellate Law Group*, an appellate boutique based in San Francisco and with a new office in Los Angeles. Kelly has clerked in both the 9th Circuit and the U.S. District Court for the District of Hawaii. Find out more about Kelly and the California Appellate Law Group at www.calapplaw.com.
Appellate Zealots is a monthly column on recent appellate decisions written by the attorneys of the California Appellate Law Group.
*In July 2022, the California Appellate Law Group was renamed the Complex Appellate Litigation Group.
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