Opinion ID: 2626200
Heading Depth: 2
Heading Rank: 1

Heading: Which Party Bears the Burden to Establish the Applicability of the Commercial Speech Exemption Under Section 425.17(c)?

Text: The Court of Appeal determined that Simpson, as the plaintiff, bore the burden of establishing that Gore's advertisement fell within the commercial speech exemption to the anti-SLAPP law, relying on the general rule that `[o]ne claiming an exemption from a general statute has the burden of proving that he comes within the exemption.' Simpson argues that the burden should have been placed on Gore, as the defendant, to establish that the exemption does not apply. He relies in particular on our summary in Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 [124 Cal.Rptr.2d 507, 52 P.3d 685] ( Equilon ), of the two-step process for analyzing anti-SLAPP motions: First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. . . . If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. (Italics added.) We agree with the Court of Appeal's construction. (4) It is a familiar and longstanding legal principle that `[w]hen a proviso . . . carves an exception out of the body of a statute or contract those who set up such exception must prove it.' ( Meacham v. Knolls Atomic Power Laboratory (2008) 554 U.S. 84, ___ [171 L.Ed.2d 283, 128 S.Ct. 2395, 2400]; see also Trade Comm'n v. Morton Salt Co. (1948) 334 U.S. 37, 44-45 [92 L.Ed. 1196, 68 S.Ct. 822] [the burden of proving justification or exemption under a special exception to the prohibitions of a statute generally rests on one who claims its benefits . . .]; accord, 29 Am.Jur.2d (2008) Evidence § 176, p. 193.) Likewise, in California, it has been declared that where the statute has exemptions, exceptions or matters which will avoid the statute the burden is on the claimant to show that he falls within that category. ( Colonial Ins. Co. v. Ind. Acc. Com. (1945) 27 Cal.2d 437, 441 [164 P.2d 490]; see also Briggs v. McCullough (1869) 36 Cal. 542, 551-552; In re Lorenzo C. (1997) 54 Cal.App.4th 1330, 1345 [63 Cal.Rptr.2d 562] [one who claims an exemption from a general statute has the burden of proving that he or she comes within the exemption].) Simpson does not dispute that section 425.16 sets forth a general statute or that section 425.17 creates specified exemptions to it. Simpson contends, though, that the familiar and long-standing rule of statutory construction governing exemptions to a general statute was abrogated by the enactment in 1965 of Evidence Code section 500, which provides: Except as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting. Although it is true that Evidence Code section 500 superseded former section 1981, which had provided that the burden of proof was on the party holding the affirmative of the issue, the change in wording did not upset the traditional rule of statutory construction. As the Law Revision Commission Comments to Evidence Code section 500 explain, the phrase the `affirmative of the issue' in former section 1981 had been criticized as establishing a meaningless standard, inasmuch as `practically any proposition may be stated in either affirmative or negative form.' (Cal. Law Revision Com. com., reprinted at 29B pt. 1 West's Ann. Evid. Code (1995 ed.) foll. § 500, p. 554.) Evidence Code section 500 was intended to make the allocation of the burden of proof easier to ascertain than the classic formulation, but not to signal a sea change in the law. ( Conservatorship of Hume (2006) 140 Cal.App.4th 1385, 1388, fn. 5 [44 Cal.Rptr.3d 906]; see also Los Angeles Unified School Dist. v. Workers' Comp. Appeals Bd. (1984) 150 Cal.App.3d 823, 829 [198 Cal.Rptr. 116] [citing the two formulations together].) Tellingly, Simpson cites nothing to support its novel claim that Evidence Code section 500 abrogated the ordinary rule of statutory construction. (Cf. 31 Cal.Jur.3d (2002) Evidence, § 90, p. 151 [What facts are essential to a particular party's claim for relief or defense is generally a matter to be determined by the substantive law, not the law of evidence; Evid. Code, § 500 does not purport to determine which facts are `essential' to the plaintiff's claim for relief and which facts are `essential' to a claimed defense, but rather leaves those substantive determinations to be resolved in light of the particular cause of action or defense at issue. (fns. omitted)].) Indeed, the Law Revision Commission comments note that Evidence Code section 500 follows th[e] basic rulei.e., `that whatever facts a party must affirmatively plead he also has the burden of proving'and is even broader, in that it appl[ies] to issues not necessarily raised in the pleadings. (Cal. Law Revision Com. com., reprinted at 29B pt. 1 West's Ann. Evid. Code, supra, foll. § 500, p. 554.) Inasmuch as Simpson concedes that [t]he initial burden should be on the plaintiff to invoke the exemption in opposition to the anti-SLAPP motion, it follows that the plaintiff also has the burden of proving the applicability of the exemption. Furthermore, the general principle of Evidence Code section 500 is that a party who seeks a court's action in his favor bears the burden of persuasion thereon. ( Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 [107 Cal.Rptr.2d 841, 24 P.3d 493].) Because establishing the commercial speech exemption is essential to Simpson's defense to the special motion to strike, Evidence Code section 500 places the burden of proof on Simpson. (See generally City of Lafayette v. East Bay Mun. Utility Dist. (1993) 16 Cal.App.4th 1005, 1017 [20 Cal.Rptr.2d 658] [`One seeking to be excluded from the sweep of the general statute must establish that the exception applies.'].) Nothing in Equilon or its discussion of the two-step process alters the analysis. ( Equilon, supra, 29 Cal.4th at p. 67.) In Equilon, we explained that the defendant has the burden to show that the cause of action being challenged under the anti-SLAPP statute is one arising from protected activity. ( Equilon, supra, at p. 67.) In discussing the defendant's burden at the first stage, Equilon construed only section 425.16, and did not purport to identify the party with the burden to establish the existence or nonexistence of the public interest exemption in section 425.17, subdivision (b), or the commercial speech exemption in section 425.17(c), inasmuch as Equilon predated the enactment of section 425.17. It is worth noting, though, that nothing in Equilon purported to abrogate the long-standing rule of construction that the party seeking to benefit from an exception to a general statute bears the burden to establish the exception. [3] (5) Simpson argues, correctly, that the ordinary rules governing allocation of the burden of proof may be disregarded for policy reasons in exceptional circumstances. ( Adams v. Murakami (1991) 54 Cal.3d 105, 119-120 [284 Cal.Rptr. 318, 813 P.2d 1348]; Cassady v. Morgan, Lewis & Bockius LLP (2006) 145 Cal.App.4th 220, 234 [51 Cal.Rptr.3d 527] ( Cassady ).) Yet such exceptions are few, and narrow ( Sargent Fletcher, Inc. v. Able Corp. (2003) 110 Cal.App.4th 1658, 1670 [3 Cal.Rptr.3d 279]), and the reasons justifying a shift in the normal allocation of the burden of proof must be compelling ( Aydin Corp. v. First State Ins. Co. (1998) 18 Cal.4th 1183, 1193 [77 Cal.Rptr.2d 537, 959 P.2d 1213]; accord, Meacham v. Knolls Atomic Power Laboratory, supra, 554 U.S. at p. ___ [128 S.Ct. at p. 2400]). Simpson fails to identify any compelling justification. Simpson does assert that the facts underlying the commercial speech exemption are peculiarly within the speaker's knowledge. But Simpson does not explain how a plaintiff would be significantly disadvantaged in demonstrating that the statement or conduct underlying its cause of action consists of representations of fact about [the defendant]'s or a business competitor's business operations, goods, or services; that the defendant's statement or conduct was made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services or in the course of delivering the person's goods or services; or that the intended audience was an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer. (§ 425.17(c)(1), (2); see generally Schaffer v. Weast (2005) 546 U.S. 49, 60 [163 L.Ed.2d 387, 126 S.Ct. 528] [`Very often one must plead and prove matters as to which his adversary has superior access to the proof.'].) In sum, Simpson does not persuade us that section 425.17(c) presents one of those `rare occasions' justifying a deviation from the normal allocation of the burden of proof. ( Cassady, supra, 145 Cal.App.4th at p. 234.) (6) The burden of proof as to the applicability of the commercial speech exemption, therefore, falls on the party seeking the benefit of iti.e., the plaintiff.