Source: https://caselaw.findlaw.com/ca-court-of-appeal/1072677.html
Timestamp: 2019-04-21 19:15:35+00:00

Document:
PAUL FOR COUNCIL, Plaintiff and Appellant, v. Ricki HANYECZ et al., Defendants and Respondents.
William J. Cleary, Jr., Los Angeles; Paul M. Christiansen, for Plaintiff and Appellant. Reed & Davidson, Dana W. Reed and Bradley W. Hertz, for Defendants and Respondents.
We find the trial court erred when it (1) ruled this is a SLAPP suit, and then (2) required plaintiff, upon pain of dismissal, to demonstrate the probability of the suit's success. We reach this conclusion because the record demonstrates the defendants were not engaged in a valid exercise of their constitutional rights of freedom of speech or petition for redress of grievances. We thus conclude this suit should not have been dismissed. Given our conclusion, it necessarily follows that defendants were not entitled to an award of costs and attorney's fees.
Plaintiff's complaint alleged he was elected to the Laguna Niguel City Council in 1989. In 1994, Paul for Council was the official committee acting on plaintiff's behalf in his bid for another term on the council. The thrust of the complaint is that defendants interfered with plaintiff's candidacy by influencing the election with illegal campaign contributions for one of his opponents. Plaintiff alleged that defendants' acts violated the Political Reform Act of 1974 (Gov.Code, § 81000 et seq., [“the Political Reform Act”] ).
In granting defendants' special motion to strike, the trial court ruled that defendants' acts which prompted this suit “were, by definition, acts in furtherance of defendants' constitutional rights of free speech. Political contributions are at the very core of First Amendment activity, ․ This is a SLAPP suit.” The court also ruled that because plaintiff had not shown he has a reasonable probability of prevailing on any of his causes of action, judgment should be entered in defendants' favor. Thereafter, judgment was so entered, the complaint was dismissed, and defendants were awarded section 425.16 attorney's fees and costs. Plaintiff has now prosecuted this timely appeal.
In this appeal we address the question as to whether a defendant can properly claim that an action filed against it is a SLAPP suit for which it is entitled to section 425.16 protection, when its conduct involved actions which violate the law; or to put it another way, can a defendant successfully assert that although the acts in which it engaged, and which are the subject of the plaintiff's complaint, were illegal, they were done in furtherance of the constitutional rights of free speech or petition for redress of grievances in connection with a public issue and therefore the plaintiff is required, under section 425.16, to meet the predicate showing mandated by that statute?
As we explain, we hold that in such circumstances, defendants are not entitled to protection under section 425.16. Therefore, in the instant case, the trial court erred when it (1) required plaintiff to establish a probability that he would prevail in this suit, (2) struck the complaint and dismissed the suit when plaintiff failed to do so, and (3) awarded defendants attorney's fees and costs of suit.
We also consider the process that a trial court uses in determining whether a defendant who brings a section 425.16 special motion to strike has successfully met its burden of showing that the acts upon which the plaintiff bases its causes of action were ones taken by the defendant in furtherance of the defendant's rights of petition or free speech in connection with a public issue.
Finally, we address plaintiff's assertions that he is entitled to have defendants pay the trial court and appellate attorney's fees and costs which he incurred in connection with defendants' motion to strike.
In the instant case, we need not address the second step of section 425.16' s two-step motion to strike process because we hold, as a matter of law, that defendants cannot meet their burden on the first step. As discussed below, the activity of which plaintiff complains-defendants' campaign money laundering-was not a valid activity undertaken by defendants in furtherance of their constitutional right free speech. This conclusion is established by the factual record before us and is not really disputed by the defendants. Indeed, defendants argue that they are entitled to the benefit of section 425.16 in spite of such illegality.
The making of a political campaign contribution is a type of political speech. “A contribution serves as a general expression of support for the candidate and his views, ․” (Buckley v. Valeo (1976) 424 U.S. 1, 21, 96 S.Ct. 612, 635, 46 L.Ed.2d 659, 689, limited on another point in Ryder v. United States (1995) 515 U.S. 177, 183-184, 115 S.Ct. 2031, 2036, 132 L.Ed.2d 136, 144.) Defendants contend their campaign money laundering activity was taken “in furtherance ” of their constitutional right of free speech, and therefore such activity comes within the parameters of section 425.16's protection, even though such activity was found to be illegal. We do not agree with their conclusion.
In Wilcox, supra, 27 Cal.App.4th at p. 820, 33 Cal.Rptr.2d 446, the court gave an example of how conduct may touch on an issue of free speech but not be protected under section 425.16. The court stated that if a defendant who brings a section 425.16 motion to strike shows that the act which prompted the suit against him was his own suit against a developer, “the defendant would have a prima facie First Amendment defense. [Citation.] But, if the defendant's act was burning down the developer's office as a political protest the defendant's motion to strike could be summarily denied without putting the developer to the burden of establishing the probability of success on the merits in a tort suit against defendant.” While laundering campaign contributions may not be as dramatic or physically dangerous as burning down a building, it is equally outside the scope of section 425.16's protection.
Because defendants have not shown that plaintiff's suit was brought primarily to chill a valid exercise of their constitutional rights of free speech or petition for redress of grievances in connection with a public issue, plaintiff had no obligation to establish a probability that he will prevail on his causes of action, and the trial court was therefore required to deny defendants' motion to strike plaintiff's causes of action.
In order to avoid any misunderstanding as to the basis for our conclusions, we should make one further point. This case, as we have emphasized, involves a factual context in which the defendants have effectively conceded the illegal nature of their election campaign finance activities for which they claim constitutional protection. Thus, there was no dispute on the point and we have concluded, as a matter of law, that such activities are not a valid exercise of constitutional rights as contemplated by section 425.16. However, had there been a factual dispute as to the legality of defendants' actions, then we could not so easily have disposed of defendants' motion.
Plaintiff requests an award of attorney's fees and costs incurred by him in this appeal. If a statute authorizes an award of attorney's fees at the trial court level, then appellate attorney's fees are also recoverable unless the statute specifically provides otherwise. (Liu v. Moore (1999) 69 Cal.App.4th 745, 754, 81 Cal.Rptr.2d 807.) Section 425.16 does not specifically preclude recovery of attorney's fees in appeals involving review of section 425.16 motions to strike. However, as noted above, under section 425.16, a plaintiff may only receive trial court attorney's fees under qualified conditions. Therefore, if plaintiff convinces the trial court that such conditions exist in this case, the trial court should award plaintiff reasonable appellate attorney's fees. In any event, as the prevailing party in this appeal, plaintiff is entitled to his appellate costs under rule 26 of the California Rules Court.
The judgment of dismissal and the order awarding attorney's fees are reversed in their entirety, and the cause is remanded for further proceedings consistent with the views expressed herein. Costs on appeal to plaintiff.
3. One of the purposes of the Political Reform Act is to insure that “[r]eceipts and expenditures in election campaigns ․ be fully and truthfully disclosed in order that the voters may be fully informed and improper practices may be inhibited.” (Gov.Code, § 81002.) Documents generated in the campaign money laundering case which California's Fair Political Practices Commission brought against defendants state that “[m]aking a contribution in another person's name is one of the most serious types of violations of the Political Reform Act because it denies the public information about where candidates receive their financial support.” According to a copy of a newspaper article included in the defendants' section 425.16 moving papers, the Fair Political Practices Commission levied a fine of $94,000 against defendants.
KITCHING, J., and PERLUSS, J.*, concur.

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