Opinion ID: 2600567
Heading Depth: 3
Heading Rank: 2

Heading: Paul

Text: In Paul, the plaintiff was a city council member seeking reelection. Following his defeat, he filed an action against several individuals alleging that they 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).) ( Paul, supra, 85 Cal.App.4th at p. 1361, 102 Cal.Rptr.2d 864, italics omitted.) The defendants moved to strike the complaint as a SLAPP but [t]heir moving papers ... show[ed] that they in fact did violate the Political Reform Act when they laundered campaign contributions to persons running for local or state offices. ( Ibid. ) Nonetheless, the defendants argued that their money laundering was `in furtherance of [their] constitutional rights of free speech' and `[arose] out of acts in furtherance of [their] constitutionally protected conduct.' ( Id. at pp. 1361-1362, 102 Cal.Rptr.2d 864.) The plaintiff argued in his opposition that section 425.16[did] not apply in this case because defendants' actions in laundering campaign money do not constitute constitutionally protected activity. ( Id. at p. 1362, 102 Cal.Rptr.2d 864.) The Court of Appeal agreed with the plaintiff. After quoting the language of section 425.16, subdivision (a) on the purpose of the statute, the court discussed the respective burdens the statute places on the parties upon the filing of a motion to strike. First, the court decides whether the defendant has made a threshold prima facie showing that the defendant's acts, of which the plaintiff complains, were ones taken in furtherance of the defendant's constitutional rights of petition or free speech in connection with a public issue. [Citation.] If the court finds that such a showing has been made, then the plaintiff will be required to demonstrate that `there is a probability that the plaintiff will prevail on the claim.' [Citations.] The defendant has the burden on the first issue, the threshold issue; the plaintiff has the burden on the second issue. ( Paul, supra, 85 Cal.App.4th at p. 1364, 102 Cal.Rptr.2d 864, fn. omitted.) The court held that to meet its burden the defendant does not have to ` establish its actions are constitutionally protected under the First Amendment as a matter of law. If this were so the second clause of subdivision (b) of section 425.16 would be superfluous because by definition the plaintiff could not prevail on its claim.' [Citation.] Rather, the defendant must present a prima facie showing that the plaintiff's causes of action arise from acts of the defendant taken to further the defendant's rights of free speech or petition in connection with a public issue. [Citation.] Only if the defendant makes this prima facie showing does the trial court consider the second step of the section 425.16, subdivision (b)(1) analysis; at that point the burden shifts to the plaintiff to make a prima facie showing of facts which, if proven at trial, would support a judgment in the plaintiff's favor. ( Paul, supra, 85 Cal.App.4th at p. 1365, 102 Cal. Rptr.2d 864.) Applying the statutory procedure thus described to the case before it, the Paul court held that 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. . . . [T]he activity of which plaintiff complains defendants' campaign money laundering was not a valid activity undertaken by defendants in furtherance of their constitutional right of 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. ( Paul, supra, 85 Cal.App.4th at p. 1365, 102 Cal.Rptr.2d 864.) Paul acknowledged that the making of a political campaign contribution is a type of political speech. ( Paul, supra, 85 Cal. App.4th at pp. 1365, 102 Cal.Rptr.2d 864.) Nonetheless it rejected the defendants' claim that, because their money laundering activity was taken in furtherance of their constitutional right of free speech, the activity fell within the ambit of the anti-SLAPP statute even though illegal. ( Ibid. ) [T]he probability that the Legislature intended to give defendants section 425.16 protection from a lawsuit based on injuries they are alleged to have caused by their illegal campaign money laundering scheme is as unlikely as the probability that such protection would exist for them if they injured plaintiff while robbing a bank to obtain money for the campaign contributions or while hijacking a car to drive the campaign contributions to the post office for mailing.... Thus, while it is technically true that laundering campaign contributions is an act in furtherance of the giving of such contributions, that is, is in furtherance of an act of free speech, we reject the notion that section 425.16 exists to protect such illegal activity. ( Id. at p. 1366, 102 Cal.Rptr.2d 864.) In support of its conclusion, Paul cited Wilcox v. Superior Court (1994) 27 Cal. App.4th 809, 33 Cal.Rptr.2d 446, disapproved on other grounds in Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th at page 68, footnote 5, 124 Cal.Rptr.2d 507, 52 P.3d 685, which distinguished between activity that would be protected under the statute and activity that would not. Thus, if the defendant's act was a lawsuit 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. ( Wilcox v. Superior Court, supra, 27 Cal.App.4th at p. 820, 33 Cal.Rptr.2d 446.) The Paul court commented: While laundering campaign money 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. ( Paul, supra, 85 Cal. App.4th at p. 1367, 102 Cal.Rptr.2d 864.) Paul emphasized the narrow circumstance in which a defendant's assertedly protected activity could be found to be illegal as a matter of law and therefore not within the purview of section 425.16. This case . . . involves a factual context in which defendants have effectively conceded the illegal nature of their election campaign activities for which they claim constitutional protection. Thus, there was no dispute on that 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. ( Paul, supra, 85 Cal.App.4th at p. 1367, 102 Cal. Rptr.2d 864.) The court explained that, if the plaintiff contested the validity of the defendant's exercise of protected rights and unlike the case here, cannot demonstrate as a matter of law that the defendant's acts do not fall under section 425.16's protection, then the claimed illegitimacy of the defendant's acts is an issue which the plaintiff must raise and support in the context of the discharge of the plaintiff's burden to provide a prima facie showing of the merits of the plaintiff's case. ( Ibid. ) In Paul, then, the court discerned that section 425.16, by its express terms, does not apply to any activity that can conceivably be characterized as being `in furtherance' of a defendant's protected speech or petition rights if, as a matter of law, that activity was illegal and by reason of the illegality not constitutionally protected. ( Paul, supra, 85 Cal.App.4th at p. 1367, 102 Cal.Rptr.2d 864.) In such a narrow circumstance, where either the defendant concedes the illegality of its conduct or the illegality is conclusively shown by the evidence, the motion must be denied. The rationale is that the defendant cannot make a threshold showing that the illegal conduct falls within the purview of the statute and promotes section 425.16's purpose to prevent and deter `lawsuits [referred to as SLAPP's] brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.' (§ 425.16, subd. (a).) ( Varian Medical Systems, Inc. v. Delfino, supra, 35 Cal.4th at p. 192, 25 Cal.Rptr.3d 298, 106 P.3d 958.) If, however, a factual dispute exists about the legitimacy of the defendant's conduct, it cannot be resolved within the first step but must be raised by the plaintiff in connection with the plaintiff's burden to show a probability of prevailing on the merits. Paul's interpretation of section 425.16 has been unanimously accepted in the Court of Appeal. (See e.g., City of Los Angeles v. Animal Defense League (2006) 135 Cal.App.4th 606, 621, 37 Cal.Rptr.3d 632[[I]f the defendant concedes the conduct complained of was illegal, the defendant will be unable to make a prima facie showing the action arises from protected activity within the meaning of section 425.16]; Huntingdon Life Sciences v. Stop Huntingdon Animal Cruelty U.S.A., Inc. (2005) 129 Cal.App.4th 1228, 1246, 29 Cal.Rptr.3d 521 [If a defendant concedes or the evidence conclusively establishes the conduct complained of was illegal, as a matter of law the defendant cannot make a prima facie showing the action arises from protected activity within the meaning of section 425.16]; 1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 584, 132 Cal.Rptr.2d 789 [Noting Paul explicitly recognized that the validity of defendant's act comes into play in the second stage of the statutory analysis. [Citation.] It held, however, that the defendants, having admitted engaging in illegal campaign contributions (the subject of the suit), had established that their acts had not been in furtherance of their constitutional rights]; Yu v. Signet Bank of Virginia (2002) 103 Cal.App.4th 298, 317, 126 Cal.Rptr.2d 516, fn. 3 [It is not argued that the illegality of Banks' petitioning activity has been effectively conceded, or conclusively established by the evidence]; Governor Gray Davis Com. v. American Taxpayers Alliance (2002) 102 Cal.App.4th 449, 459, 125 Cal.Rptr.2d 534 [Here, in contrast [to Paul ], appellant neither has conceded nor does the evidence conclusively establish the illegality of its communication made during the course of debate on political issues]; Chavez v. Mendoza (2001) 94 Cal. App.4th 1083, 1090, 114 Cal.Rptr.2d 825 [A limited exception to the rule precluding a court from determining the validity of the asserted constitutional right in the first step of the anti-SLAPP analysis applies only where the defendant indisputably concedes the claim arose from illegal or constitutionally unprotected activity].) Paul also finds support in our decision in the companion case of Soukup v. Hafif , which examines section 425.18. Section 425.18 exempts from the anti-SLAPP statute `SLAPPback[s]' ... any cause of action for malicious prosecution or abuse of process arising from the filing or maintenance of a prior cause of action that has been dismissed pursuant to a special motion to strike under section 425.16 (§ 425.18, subd (b)(1))if the underlying action was illegal as a matter of law. (§ 425.18, subd. (h).) By enacting section 425.18, the Legislature signaled its agreement with the interpretation of the scope of section 425.16 advanced by Paul. In adding this proviso, the Legislature appears to have had in mind decisions by the Courts of Appeal that have held that the anti-SLAPP statute is not available to a defendant who claims that the plaintiff's cause of action arises from assertedly protected activity when that activity is illegal as a matter of law and, for that reason, not protected by the First Amendment. (See, e.g., Paul [, supra, ] 85 Cal.App.4th 1356 [102 Cal.Rptr.2d 864], disapproved on other grounds in Equilon Enterprises v. Consumer Cause Inc., supra, 29 Cal.4th at p. 15 [68], fn. 5 [124 Cal.Rptr.2d 507, 52 P.3d 685].) ( Soukup v. Hafif, supra, ___ Cal.4th at p. ___ [46 Cal.Rptr.3d at p. 656, 139 P.3d at p. 46].) [7] We agree with Paul that section 425.16 cannot be invoked by a defendant whose assertedly protected activity is illegal as a matter of law and, for that reason, not protected by constitutional guarantees of free speech and petition. A contrary rule would be inconsistent with the purpose of the anti-SLAPP statute as revealed by its language. ( Paul, supra, 85 Cal.App.4th at p. 1365, 102 Cal.Rptr.2d 864[[T]he activity of which plaintiff complains . . . was not a valid activity undertaken by defendants in furtherance of their constitutional right [to] free speech].) Moreover, it would eviscerate the first step of the two-step inquiry set forth in the statute if the defendant's mere assertion that his underlying activity was constitutionally protected sufficed to shift the burden to the plaintiff to establish a probability of prevailing where it could be conclusively shown that the defendant's underlying activity was illegal and not constitutionally protected. While a defendant need only make a prima facie showing that the underlying activity falls within the ambit of the statute, clearly the statute envisions that the courts do more than simply rubber stamp such assertions before moving on to the second step. ( Wilcox v. Superior Court, supra, 27 Cal. App.4th at p. 819, 33 Cal.Rptr.2d 446[[I]t is fundamentally fair that before putting the plaintiff to the burden of establishing probability of success on the merits the defendant be required to show imposing that burden is justified by the nature of the plaintiff's complaint].) Furthermore, as the Attorney General points out in his amicus curiae brief, [i]f the courts rule that a defendant who has engaged in indisputably illegal behavior . . . has met the first step of the motion to strike, the defendant can then shift the burden to the plaintiff and force his victim to [marshal] and present evidence early in the litigation before the commencement of full discovery.... [I]f the plaintiff/victim is unable to show a probability of prevailing, he will have to pay the defendant's attorneys fees. (See § 425.16, subd. (c).) These are ... grossly unfair burdens to impose on a plaintiff who is himself the victim of the defendant's criminal activity. Citing Navellier v. Sletten (2002) 29 Cal.4th 82, 124 Cal.Rptr.2d 530, 52 P.3d 703 ( Navellier ), Mauro argues that any claimed illegitimacy of the defendant's assertion of protected rights in a motion to strike under section 425.16 must be decided under the second step of the statutory inquiry, which requires plaintiffs to show their action has minimal merit. ( Navellier, at p. 89, 124 Cal.Rptr.2d 530, 52 P.3d 703.) Navellier, however, is not dispositive of the issue before us. In Navellier, the plaintiffs sued the defendant in federal court alleging breach of fiduciary duty in connection with the defendant's management of an investment company established by the plaintiffs. While the federal action was pending, the parties entered into an agreement that included a release of claims that the defendant signed. Subsequently, however, when the plaintiffs amended their complaint in the federal action, the defendant filed counterclaims. The plaintiffs obtained dismissal of two of the counterclaims based on the release. Ultimately, the federal action went to trial and resulted in a defense verdict. On appeal, the Ninth Circuit affirmed judgment for the defendant but also affirmed the dismissal of the defendant's counterclaims on the grounds they were barred by the release of claims. ( Navellier v. Sletten, supra, 29 Cal.4th at pp. 86-87, 124 Cal.Rptr.2d 530, 52 P.3d 703.) While the federal appeal was pending, the plaintiffs filed a state action alleging that [the defendant] had committed fraud in misrepresenting his intention to be bound by the Release, so as to induce plaintiffs to incur various litigation costs in the federal action that they would not have incurred had they known [the defendant's] true intentions. Plaintiffs also alleged that [the defendant] had committed breach of contract by filing counterclaims in the federal action. ( Navellier v. Sletten, supra, 29 Cal.4th at p. 87, 124 Cal.Rptr.2d 530, 52 P.3d 703.) The defendant filed a motion to strike the complaint as a SLAPP. The trial court denied the motion and the Court of Appeal affirmed. We reversed. The principal issue in Navellier was whether the plaintiffs' causes of action for fraud and breach of contract arose from acts in furtherance of the defendant's exercise of protected speech or petition rights. We concluded that they did. We observed that the fraud claim was based on the defendant's negotiation, execution, and repudiation of the Release which limited the types of claims that [the defendant] was allowed to file in the federal action, and that the plaintiffs relied on the Release when they moved to dismiss the defendant's counterclaims. ( Navellier v. Sletten, supra, 29 Cal.4th at p. 90, 124 Cal.Rptr.2d 530, 52 P.3d 703.) Thus, the defendant's negotiation and execution of the Release ... involved `statement[s] or writing[s] made in connection with an issue under consideration or review by a ... judicial body' (§ 425.16, subd. (e)(2)), i.e., the federal district court, and his arguments respecting the Release's validity were `statement[s] or writing[s] made before a ... judicial proceeding' ( id., subd. (e)(1)), i.e., the federal action. ( Ibid. ) Similarly, we concluded that the plaintiffs' breach of contract cause of action involved activity protected by the anti-SLAPP statute because it was based on the defendant's filing of his counterclaims in the federal action. A claim for relief filed in federal district court indisputably is a `statement or writing made before a ... judicial proceeding.' ( Ibid. ) Only at the end of our analysis did we address the plaintiffs' claim that the anti-SLAPP statute does not apply to this action because any petitioning activity on which it was based was not `valid.' ( Navellier v. Sletten, supra, 29 Cal.4th at p. 94, 124 Cal.Rptr.2d 530, 52 P.3d 703.) The precise argument, as summarized in the dissent, was that [t]he breach of contract claim is not a SLAPP because [the defendant] had exchanged his right to sue through the release for consideration, and thus his petitioning was not a `valid exercise' of that right. ( Id. at p. 97, 124 Cal.Rptr.2d 530, 52 P.3d 703 (dis. opn. of Brown, J.).) The majority disagreed. That the Legislature expressed a concern in the statute's preamble with lawsuits that chill the valid exercise of First Amendment rights does not mean that a court may read a separate proof-of-validity requirement into the operative sections of the statute. [Citations.] Rather, any `claimed illegitimacy of the defendant's acts is an issue which the plaintiff must raise and support in the context of the discharge of the plaintiff's [secondary] burden to provide a prima facie showing of the merits of the plaintiff's case.' ( Paul [, supra, ] 85 Cal.App.4th 1356, 1367, 102 Cal. Rptr.2d 864.) ( Id. at p. 94, 124 Cal. Rptr.2d 530, 52 P.3d 703.) We concluded that a defendant is not required to establish that its actions are constitutionally protected as a matter of law because such a requirement would render the second prong of the anti-SLAPP statute `superfluous.' ( Id. at p. 95, 124 Cal.Rptr.2d 530, 52 P.3d 703.) Navellier did not consider whether or how the anti-SLAPP statute applies to a defendant whose assertedly protected activity is conclusively demonstrated to be illegal as a matter of law. Navellier was concerned with the threshold showing a defendant is required to make to come within the ambit of the anti-SLAPP statute where a dispute exists about whether the defendant's exercise of his or her constitutionally protected rights was valid. While we cited Paul with approval for its holding that, ordinarily, any claimed illegitimacy of the defendant's conduct must be resolved as part of a plaintiff's secondary burden to show the action has minimal merit, ( Navellier v. Sletten, supra, 29 Cal.4th at p. 87, 124 Cal.Rptr.2d 530, 52 P.3d 703), we expressed no opinion regarding Paul's conclusion that the anti-SLAPP statute does not apply in those rare cases where the defendant's assertedly protected speech or petitioning activity is conclusively demonstrated to have been illegal as a matter of law. A decision, of course, does not stand for a proposition not considered by the court. ( Nolan v. City of Anaheim (2004) 33 Cal.4th 335, 343, 14 Cal.Rptr.3d 857, 92 P.3d 350.) Accordingly, Navellier's holdingthat the anti-SLAPP statute does not require defendants who bring motions to strike under section 425.16 to prove their asserted exercise of protected speech or petition rights was valid as a matter or lawis not dispositive of the question presented here of whether a defendant whose underlying conduct is conclusively demonstrated to have been illegal as a matter of law, and thus unprotected by the federal and state constitutional speech and petition guarantees, is foreclosed from invoking the anti-SLAPP statute in the first instance. We conclude, therefore, that where a defendant brings a motion to strike under section 425.16 based on a claim that the plaintiff's action arises from activity by the defendant in furtherance of the defendant's exercise of protected speech or petition rights, but either the defendant concedes, or the evidence conclusively establishes, that the assertedly protected speech or petition activity was illegal as a matter of law, the defendant is precluded from using the anti-SLAPP statute to strike the plaintiff's action. In reaching this conclusion, we emphasize that the question of whether the defendant's underlying conduct was illegal as a matter of law is preliminary, and unrelated to the second prong question of whether the plaintiff has demonstrated a probability of prevailing, and the showing required to establish conduct illegal as a matter of laweither through defendant's concession or by uncontroverted and conclusive evidenceis not the same showing as the plaintiff's second prong showing of probability of prevailing. With this understanding, we turn to Mauro's claim that even conduct illegal as a matter of law is protected by the anti-SLAPP statute if it is protected by the litigation privilege. (Civ. Code, § 47, subd. (b).)